Do Kwon, founder of Terraform Labs, has been sentenced to 15 years in prison in the United States for defrauding investors and causing the collapse of TerraUSD and Luna cryptocurrencies, which resulted in multibillion-dollar losses.
In a federal court ruling dated December 12, Judge Paul Engelmeier described Kwon’s scheme as “a scam of epic, generational proportions,” noting it caused more harm than most federal cases in history. Kwon admitted to misleading investors by concealing his firm’s role in maintaining the exchange rate for TerraUSD.
One investor reported losing up to $500,000, calling the consequences “erasing the future.” The defendant must also pay $80 million in civil penalties and may be transferred to South Korea after serving half of his sentence.
Separately, Russian authorities have warned of a new fraudulent scheme targeting cryptocurrency investors. Fraudsters use tactics that display fake profits from non-functional exchanges to entice victims into further investments. Once victims stop contributing additional funds, scammers block access to their accounts and vanish without returning any money.
