TerraUSD founder sentenced to 15 years in prison for $40 billion mishap

A former cryptocurrency entrepreneur has been sentenced to 15 years in prison by a New York judge for his role in an “epic” fraud in which he was the driving force behind the collapse of two digital currencies and the loss of an estimated $40 billion ($29.9 billion).

Do Kwon is Korean and the co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital currencies.

Kwon acknowledged that investors were misled by TerraUSD, a so-called stablecoin that was supposed to maintain its value against the U.S. dollar.

He is one of many cryptocurrency bosses facing charges in the United States after the digital token plunged in 2022, triggering the collapse of several companies.

U.S. District Judge Paul A Engelmayer handed down the sentence, saying the Stanford University graduate repeatedly lied to investors who trusted him.

“This was a fraud of epic, generational proportions,” he said during a Manhattan court hearing Thursday.

“In the history of federal prosecutions, few frauds have caused as much harm as yours.”

Quan pleaded guilty in August to conspiracy to commit fraud and wire fraud and expressed remorse to the judge.

“I’ve spent nearly every waking moment these past few years thinking about what I could have done differently and what I could do now to make things right,” he said.

When TerraUSD fell below $1 in May 2021, Kwon told investors that computer algorithms had restored its value, prosecutors said.

Instead, according to court documents, Quan arranged for a trading company to secretly purchase millions of dollars of the tokens to artificially increase their value.