Do Kwon faces multiple charges and could face up to 130 years in prison

Terraform Labs co-founder Do Hyeong Kwon was extradited to the United States on December 31 last year and is now facing multiple federal fraud charges that could lead to a prison sentence of up to 130 years. Kwon, a South Korean citizen, was arrested in Montenegro after attempting to flee with a fake passport and was brought to the United States to stand trial in Manhattan. The Department of Justice (DOJ) alleges that from 2018 to 2022, Kwon has orchestrated one of the most elaborate schemes ever seen. This plan includes false statements, market manipulation, and embezzlement, causing over $40 billion in damages to investors following the collapse of Terraform's stablecoin UST and its sister cryptocurrency Luna. Do Kwon's plan: Will he face a 130-year prison sentence? Terraform Labs, co-founded by Do Kwon in 2018, is marketed as a revolutionary blockchain platform aimed at creating a decentralized financial ecosystem through stablecoins and decentralized applications (dApps). Terraform's ecosystem center is TerraUSD (UST), an algorithmically maintained stablecoin pegged to the US dollar through a mechanism related to Luna, another native cryptocurrency. Investors are attracted by the promise of a stable, decentralized financial system that can compete with traditional banking systems. However, cracks on the facade began to appear in May 2021 when UST temporarily lost its peg position. According to the DOJ's press release, Kwon colluded with high-frequency trading companies to artificially stabilize UST at this time, concealing systemic protocol errors in Terraform. Despite these interventions, by May 2022, the fixed exchange rate of UST was broken, causing a catastrophic collapse for both UST and Luna. This collapse has wiped out over $40 billion in market value and caused damage to countless investors worldwide. Then, Kwon was accused of trying to cover up his involvement by laundering money through multiple blockchains, exchanges, and Swiss bank accounts. The indictment by the Ministry of Justice lists multiple misconducts by Kwon, including false statements about the governance mechanism of Luna Foundation Guard (LFG), the utility of Mirror Protocol, and the alleged use of the Korean payment processing application Chai on the Terra blockchain. This misinformation describes the stability and practical application, convincing investors of the feasibility of the Terraform ecosystem. However, the Ministry of Justice affirmed that Kwon knew these statements were false and manipulated market data to maintain investor confidence. Legal consequences and potential convictions When he arrived in the United States, Do Kwon appeared in court in Manhattan before Judge Robert W. Lehrburger. The case has been assigned to Judge John P. Cronan of the United States District Court. The first hearing is scheduled to take place on January 8, 2025. The charges against Kwon include two counts of commodity fraud, two counts of securities fraud, two counts of wire fraud, and two counts of conspiracy to commit fraud and market manipulation. If convicted of all charges, Kwon could face a maximum sentence of 130 years in prison. It is noteworthy that Attorney General Merrick B. Garland emphasized the importance of leading Kwon in the press release, he emphasized: We have ensured this extradition despite Kwon's attempt to cover up by laundering his proceeds from his schemes and attempting to use fake passports to travel to a country without an extradition treaty with the United States. Garland also noted that financial crimes at this scale will not escape punishment, no matter where they are in the world. The DOJ's statement also describes Terraform's collapse as one of the biggest financial losses in the cryptocurrency field. DYOR! #Write2Earn #Write&Earn $BTC