'Stablecoin' Kingpin Goes to Jail

On Dec. 11 U.S. district judge Paul Engelmayer sentenced the South Korean crypto tycoon, Do Kwon, 34, to 15 years in federal prison, and Kwon will also forfeit $19.3 million and some properties which prosecutors claimed he gained from fraud. The judge said that Kwon committed “a fraud of epic generational scale,” and imposed a longer sentence than the 12 years sought by prosecutors. During the trial prosecutors said Kwon was driven by greed and arrogance, and had lied repeatedly about the efficacy and safety of his “stablecoins.” Kwon had pleaded guilty in August to two counts of conspiracy to defraud and wire fraud, in a plea deal where prosecutors would drop seven other charges against him. Although his “stablecoin” was “pegged to the value of the dollar,” his currency lost its peg and triggered a $40 billion crash in the entire crypto market, including the largest crypto exchange in the U.S., Sam Bankman-Fried’s FTX. In 2024 Bankman-Fried was also sentenced to 25 years in prison.