A US federal court in New York has sentenced Terraform Labs founder Do Kwon to 15 years in prison. The judgment marks a significant milestone in criminal proceedings tied to the cryptocurrency sector. The founder of Terra Luna pleaded guilty in August to financial fraud and conspiracy charges. The charges stemmed from the implosion of TerraUSD and Luna (now LUNC), which resulted in a $40 billion loss in market value in 2022.
Prosecutors handling the case described Do Kwon’s misconduct as fraud committed “on an epic, generational scale.” They highlighted evidence that investors were misled before the platform’s downfall. Do Kwon is at the center of it all, who led the platform to suffer a steep financial fall. During the hearing, victims of Terra LUNA detailed how they lost their life savings while it wiped out retirement funds for others.
Do Kwon will also have to forfeit more than $19 million in proceeds linked to the scheme as part of the plea agreement. His prosecutors pleaded for a shorter sentence so he could return to South Korea. However, US District Judge Paul A. Engelmayer denied the request from Kwon’s defense team and upheld the sentence.
The Court also made it clear that it could oppose a future application for Do Kwon’s international transfer. An agreement is being made where he would serve 7.5 years in the US, and another 7.5 years in South Korea. Also, authorities in South Korea have hinted that they intend to pursue charges carrying a lengthy penalty. Therefore, moving to South Korea for prison time could prove more damaging to the Terraform Labs founder.
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Do Kwon and the TerraUSD & LUNA Collapse
Watcher Guru extensively covered the Terra LUNA crash in 2022 holding. The token plunged to $0 in May 2022, shocking the entire cryptocurrency sector. Its stablecoin TerraUSD also depegged from the 1:1 ratio of the dollar. It went from $120 to $0 in a single day, and the freefall erased all investors’ funds and Do Kwon was accountable for his actions. A whale lost $3.6 billion, making its LUNA portfolio become $0.