Do Kwon Sentenced for Role in TerraUSD Collapse
Do Kwon, one of the co-founders of Terraform Labs, has recently been sentenced to 15 years in a Manhattan federal prison due to his role in the catastrophic collapse of the TerraUSD stablecoin, which resulted in losses exceeding $40 billion.
Legal Proceedings in South Korea
Following this development, South Korean prosecutors have initiated plans to bring Kwon to trial in his home country, where they are reportedly aiming for a sentence that could surpass 30 years, primarily based on breaches of capital market regulations.
Details of the Sentencing
Kwon, who is 34 years old, may be eligible to seek extradition back to South Korea after he completes half of his prison term in the U.S. Just before the sentencing, U.S. District Judge Paul Engelmayer highlighted the unprecedented destruction caused by Kwon’s fraudulent activities, saying:
“In the history of federal prosecutions, few fraud cases have caused such significant damage.”
Impact on Investors
The fallout from Kwon’s actions has had a devastating impact on around 200,000 South Korean investors, who collectively incurred a staggering loss approaching 300 billion won, which translates to roughly $204 million. Kwon has confessed to being knowingly involved in deceiving investors in the Terraform Labs cryptocurrency venture from 2018 to 2022, leading to the disastrous collapse of both TerraUSD and its associated Luna token in May 2022, which triggered a broader crisis within the cryptocurrency sector.
