South Korean Crypto Businessman and Defrachster do Kwon was sentenced to 15 years in prison by a US Federal judge in the southern district of New York on Thursday.
Kwon cut a dignified figure as he was escorted into the courtroom, his head bowed, his cheeks flushed as if they had lost significant weight. He wears a bright prison jumpsuit with a long sleeved shirt, with tights at the waist and arms.
In August, Ken pleaded guilty to defrauding investors who bought crypto coins. In May 2022, the sudden collapse of those coins wiped out $40 billion and sent the crypto economy into a tailspin noise that added many other companies.
“Kwon’s fraud was colossal in scale, often affecting all aspects of the terraform joint venture,” US prosecutors wrote in a recent court filing. “His collective lies left a trail of financial destruction in his wake.”
Given the opportunity to face the Court on Thursday, Kwon said he took the responsibility alone by deception. After thanking his former colleagues and supporters, some of whom had gathered in the public gallery, he became emotional. His lawyers, on his left and right, rub his back.
The charges against Kwon carry a maximum sentence of 25 years in prison. Before the hearing, prosecutors had planned for a prison term of twelve years. But the presiding judge, Paul Engelmayer, ruled that a more punitive sentence was needed to deter future crypto fraudsters.
“This case will be there as a reminder of how bad it was and what happened,” Engelmayer told the court. “For the following, if you cheat, you will lose your freedom for a long time.”
When he was joined in a procession outside the courtroom after receiving his sentence, Kwon appeared to be holding back tears. The chain hanging between his feet is struggling to the ground.
Well, stablecoin
Kwon started Terraform in 2018, alongside co-founder Daniel Shin. After two years, the company announced plans to open TerrausD (Ust), a stablecoin whose value was determined by the algorithm of the US dollar. The algorithm will successfully bind to the second coin issued by the firm, luna. The dollar value of Luna can be exchanged for the dollar UST, and vice versa. If UTT were to stay below $1, traders would be prompted to buy LUNA until the target price is restored.
“It was an interesting and very novel approach,” Noelle Acheson, an analyst who previously worked at Crypto Brokerage Genesis, told Intelligence last year. “Many of your smart people believe it will work.”
In May 2022, the price adjustment system is planned. When traders sold large amounts of UST, it moved away from its dollar peg, leading to panic selling that drove the price to zero. In a now-circling tweet, Kwon tried to stop the seller, writing, “sending more tough lads.” But the value of UTT and Luna has deviated, wiping $40 billion from the market.
