Crypto entrepreneur Do Kwon faces sentencing for deceiving investors who lost billions in a stablecoin collapse.

Do Kwon to Be Sentenced for Misleading Investors

NEW YORK – Do Kwon, the crypto figure involved in a major collapse in 2022, is set to be sentenced Thursday for deceiving investors, leading to massive losses in his cryptocurrency ecosystem.

Kwon, often referred to as the “cryptocurrency king,” pleaded guilty after being indicted in federal court in Manhattan last August on fraud charges related to Terraform Labs’ $40 billion downfall.

The company had positioned its stablecoin, TerraUSD, as a trustworthy option, a type of digital currency designed to maintain a consistent value by being tied to a stable asset. However, prosecutors argue this was a facade, causing severe harm to investors and triggering a series of crises in the crypto market.

The South Korean national has agreed to forfeit over $19 million as part of his plea deal.

Federal guidelines suggest a sentence of around 25 years, yet prosecutors are seeking a 12-year prison term, noting his guilty plea, pending charges in South Korea, and his ongoing sentence in Montenegro while awaiting extradition.

Prosecutors expressed in a memo to the judge that Kwon’s fraud was extensive and affected nearly every aspect of Terraform’s operations, resulting in significant economic damage.

In defense, Kwon’s lawyer countered that his client’s actions were driven not by greed but by a sense of arrogance and urgency, recommending a much lighter sentence of five years.

Kwon himself addressed the court, acknowledging his role in the investors’ suffering. “I alone am responsible for your pain. I misled the community due to my arrogance,” he wrote, expressing regret for the falsehoods that arose from his overconfidence.

The collapse of the Singapore-based cryptocurrency company, co-founded by Kwon in 2018, resulted in significant financial losses for investors worldwide. With TerraUSD’s value plummeting below its intended peg, its holders, along with those of its sister currency Luna, faced nearly $40 billion in lost market capitalization.