Do Kwon, a crypto entrepreneur who created two virtual currencies that spectacularly melted down, prompting a market crisis in 2022, was sentenced to 15 years in prison on Thursday.
Mr. Kwon, 34, became a cautionary tale of crypto hubris when the digital currencies he designed — TerraUSD and Luna — lost all their value practically overnight. The crash caused a chain reaction that led to the collapse of a string of major crypto companies. Mr. Kwon was charged with fraud and eventually pleaded guilty after an international manhunt spanning Asia and Europe.
Mr. Kwon’s lawyers had sought a sentence of no more than five years, arguing that his criminal behavior flowed from arrogance and desperation, rather than personal greed. Prosecutors argued that he should receive a 12-year sentence, because he had lied to investors about his cryptocurrencies and then “fled from the wreckage” when the coins imploded.
Mr. Kwon is the latest high-profile crypto executive to be punished for the 2022 market crisis. Last year, Sam Bankman-Fried, the disgraced founder of the FTX crypto exchange, was sentenced to 25 years in prison.
Other leading figures in the crypto world have received leniency. Changpeng Zhao, the founder of the Binance exchange, was sentenced to four months in prison after pleading guilty to a money-laundering violation in 2023. President Trump, a vocal crypto proponent, granted Mr. Zhao a pardon in October.
On Thursday, Mr. Kwon was escorted into the federal courtroom in New York in shackles. The judge then heard from victims who suffered financial harm because of what they said was Mr. Kwon’s deceit. One, who lives in Georgia, said through a Russian interpreter on the phone that she had invested the value of her home in Luna, lost it all and became homeless on the streets of Tbilisi.
In a statement to the court, Mr. Kwon said, “Blame should be pointed at me for everyone’s suffering.”
For years, Mr. Kwon marketed his cryptocurrencies aggressively, cultivating a brash persona on social media, where he mocked his critics with taunts like “I don’t debate the poor.” At their peak, his coins were worth more than $50 billion, according to federal prosecutors. Mr. Kwon named his daughter Luna in honor of what he called “my greatest invention.”
“Looking back, I cannot comprehend my own hubris, and wish I had not silenced the warnings,” Mr. Kwon wrote in a letter to the court last month. “I am sorry.”
His empire collapsed in May 2022. Luna’s price dropped to nearly $0, dragging TerraUSD, a so-called stablecoin, down with it. The plunge drained the accounts of investors and devastated start-ups that were building businesses using Mr. Kwon’s technology.
Mr. Kwon lied about the stability of his cryptocurrencies, prosecutors said, and engaged in “deceptive conduct to pump up” their value. He also falsely claimed that a Korean payment processor was conducting billions of dollars in transactions using his technology, according to prosecutors.
After Luna crashed, Mr. Kwon went on the run. He spent time in Serbia and was arrested in Montenegro in March 2023, as he tried to board a flight to Dubai using a fake passport.
“Do made the decision not to turn himself in,” his lawyers wrote in a memo to the court. “Do knows that avoiding arrest was wrong.”
He pleaded guilty in August, after he was extradited to the United States from Montenegro, where he had spent nearly two years in prison
“I alone am responsible for everyone’s pain,” Mr. Kwon wrote in the letter to the court. “I hope that it brings some small comfort to those I’ve failed that I will embrace any sentence the court would have of me.”
Emmett Lindner is a business reporter for The Times.
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