Do Kwon de Terra is declared guilty of fraud for Crypto collapse of USD $ 40 billion

By Hannah Pérez

“What I did was wrong and I want to apologize,” Kwon said in a New York court, assuming “total responsibility” for Terra’s collapse of more than USD $ 40 billion in 2022.

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The founder of Terra declared himself guilty in a criminal case in the United States.
Do Kwon directed the project that collapsed in 2022, erasing more than USD $ 40 billion.
“What I did was wrong and I want to apologize,” Kwon said assuming “total responsibility.”
He could face a sentence of up to 12 years in prison as part of the agreement with prosecutors.

Do Kwon, the South Korean businessman who founded the cryptocurrency Terrahas declared guilty of fraud in the United States three years after the resounding project for billions of dollars.

At a hearing in New York on Tuesday, Kwon, 33, announced before a federal judge his statement of guilt for positions of conspiracy and electronic fraud under an agreement with US prosecutors, reported Bloomberg.

He also agreed to lose USD $ 19.3 million and some properties as part of the guilt agreement, according to the report. Kwon told the court that he would resign the right to go to trial and acknowledged that he could face 25 years in prison, according to a publication of Inner City Presswhich reported separately the news in social networks channels.

“I consciously accepted with others to disappoint, and in fact I disappointed, cryptocurrency buyers issued by my company, Terraft Labs”Kwon said, reading a statement, the media cited. “What I did was wrong and I want to apologize for my behavior. I assume all responsibility. ”

The statement represents a decisive turn in its defense, after Kwon initially denied the charges. A report on Monday had advanced the intention of the businessman to declare himself guilty to US justice.

Do kwon and the collapse of Terra

Kwon is known for having created Terraa cryptocurrency project that took advantage of an algorithmic model formed by two tokens: the Stablecoin Terrausd (UST), designed to stay in parity with the dollar, and Luna, the native token of the project linked to UST that absorbed volatility by means of burning and coinage.

In May 2022, he lost his parity with the dollar, falling just some cents. Simultaneously, the moon value collapsed from maximum around USD $ 119 to practically zero. The collapse caused about USD to be deleted $ 45 billion of the capitalization of the cryptocurrency market in the course of a week.

The event unleashed a panic wave throughout the digital currency ecosystem, dragging large companies such as FTX and causing additional bankruptcies. TERRAFORM LABS responded temporarily suspending his Blockchain and then relating a separate version of the project called Terra 2.0. The new token was renamed Luna Classic (Lunc).

TERRAFORM LABSthe entity behind the project whose CEO was Kwon, declared bankruptcy in the US in January 2024.

Face prison sentence up to 12 years

Kwon was accused both in South Korea and the United States in relation to the collapse of Terra. In January it was extradited to the United States after almost two years in Montenegro, where he had been arrested and convicted of using a false passport while fleeing the authorities of his southern native Korea.

Terraft And Kwon were found responsible of civil fraud charges in a 2024 demand filed by the United States Stock Exchange and Securities Commission (SEC). At the end of a two -week trial, a jury in New York determined in May last year that both defendants deceived investors.

The face behind Terra He had faced nine positions under the last criminal accusation in the United States.

The sentence is scheduled for December 11according to reports. American prosecutors said The longest sentence they will request under the guilt agreement is 12 yearsthe coverage added.

Hannah Estefanía Pérez / Diariobitcoin

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