New York (AFP) – South Korean cryptocurrency tycoon Do Kwon was sentenced to 15 years in prison Thursday over fraud linked to his company’s failure, which wiped out $40 billion of investors’ money and shook global crypto markets, US media reported. Kwon, who nurtured two digital currencies central to the bankruptcy, was sentenced at the New York court where he pleaded guilty in August after an international manhunt spanning Asia and Europe. He still faces fraud charges in his native South Korea.
The 34-year-old’s Terraform Labs created a cryptocurrency called TerraUSD that was marketed as a “stablecoin,” a token that is pegged to stable assets such as the US dollar to prevent drastic fluctuations. Kwon successfully marketed them as the next big thing in crypto, attracting billions in investments and global hype. He was flooded with praise in South Korean media, which described him as a “genius” as thousands of private investors lined up to pour cash into his company. And in 2019, Kwon featured in Forbes’ 30 under 30 Asia list.
But despite billions in investments, TerraUSD and its sister token Luna went into a death spiral in May 2022. Experts said Kwon had set up a glorified pyramid scheme, in which many investors lost their life savings. He left South Korea before the crash and spent months on the run. The crypto tycoon was arrested in March 2023 at the airport in Podgorica, the Montenegrin capital, while preparing to board a flight to Dubai, in possession of a fake Costa Rican passport. He was extradited last year from Montenegro to the United States.
© 2024 AFP
