Terra founder Do Kwon sentenced to 15 years in prison by a U.S. court

Source: DecenterKorea Original Title: ‘Terra Crisis’ Do Kwon Sentenced to 15 Years in U.S. Court Original Link:

The founder of Terraform Labs, Do Kwon(34), who is facing criminal trial in the United States on charges including fraud related to the issuance of the algorithmic stablecoin TerraUSD(UST), has been sentenced to 15 years in prison by a court.

Judge Paul Engelmeier of the Southern District Court of New York announced the sentence on the 11th(local time) during the sentencing hearing. Do Kwon(34), who was indicted earlier in August on charges of conspiracy to commit fraud and using communication networks for fraud, had already pleaded guilty to these charges, and the court proceeded directly to sentencing without a trial on the facts.

U.S. prosecutors, in exchange for Do Kwon’s guilty plea, recommended a maximum sentence of 12 years, and Do Kwon’s defense requested that the sentence not exceed 5 years, considering his detention in Montenegro and facing additional criminal charges in Korea. However, the court ultimately sentenced him to a higher term than the prosecution’s recommendation. In addition to the $19 million(approximately 29 billion won), other assets will also be confiscated.

Earlier, U.S. federal prosecutors charged Do Kwon in March 2023 with a total of 8 counts, including securities fraud, wire fraud, commodity fraud, and market manipulation conspiracy, after his arrest in Montenegro. After being extradited to the U.S., charges of money laundering conspiracy were also added. If all nine charges are proven guilty, Do Kwon could face up to 130 years in prison.

Immediately after his extradition to the U.S., Do Kwon claimed innocence on all nine counts, but in August, he suddenly changed his stance and pleaded guilty to two charges, including conspiracy to commit fraud and wire fraud. Prosecutors have agreed that even if Do Kwon applies for the international prisoner transfer program after serving half of his sentence in the U.S., the U.S. Department of Justice will not oppose it. As a result, Do Kwon may be transferred to Korea at his own request in the future.

Apart from the criminal trial in the U.S., Do Kwon is also under investigation in Korea for violations of the Capital Markets Act and other charges. After his arrest in Montenegro, he argued that he should be extradited to Korea rather than the U.S., but he was ultimately transferred to the U.S. for trial.

Terraform Labs claimed that by issuing the stablecoin UST and using an algorithmic structure linked to the price of the cryptocurrency Luna(LUNA), the value was fixed at $1. However, contrary to Terraform Labs’ claims, the dollar peg broke, causing investor losses of approximately $40 billionabout 59 trillion won.