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Do Kwon sentenced to 15 years in prison for $40 billion stablecoin fraud
Topics in Legal News |
2025/12/11 22:10
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Onetime cryptocurrency mogul Do Kwon was sentenced Thursday to 15 years in prison after a $40 billion crash revealed his crypto ecosystem to be a fraud. Victims said the 34-year-old financial technology whiz weaponized their trust to convince them that the investment — secretly propped up by cash infusions — was safe.
Kwon, a Stanford graduate known by some as “the cryptocurrency king,” apologized after listening as victims — one in court and others by telephone — described the scam’s toll: wiping out nest eggs, depleting charities and wrecking lives. One told the judge in a letter that he contemplated suicide after his father lost his retirement money in the scheme.
Judge Paul A. Engelmayer said at a daylong sentencing hearing in Manhattan federal court that the government’s recommendation of 12 years in prison was “unreasonably lenient” and that the defense’s request for five years was “utterly unthinkable and wildly unreasonable.” Kwon faced a maximum sentence of 25 years in prison.
“Your offense caused real people to lose $40 billion in real money, not some paper loss,” Engelmayer told Kwon, who sat at the defense table in a yellow jail suit. The judge called it “a fraud on an epic, generational scale” and said Kwon had an “almost mystical hold” on investors and caused incalculable “human wreckage.”
Kwon pleaded guilty in August to fraud charges stemming from the collapse of Terraform Labs, the Singapore-based firm he co-founded in 2018. The loss exceeded the combined losses from FTX founder Sam Bankman-Fried and OneCoin co-founder Karl Sebastian Greenwood’s frauds, prosecutors said. Engelmayer estimated there may have been a million victims.
Terraform Labs had touted its TerraUSD as a reliable “stablecoin” — a kind of currency typically pegged to stable assets to prevent drastic fluctuations in prices. But prosecutors say it was an illusion backed by outside cash infusions that came crumbling down after it plunged far below its $1 peg. The crash devastated investors in TerraUSD and its floating sister currency, Luna, triggering “a cascade of crises that swept through cryptocurrency markets.”
Kwon tried to rebuild Terraform Labs in Singapore before fleeing to the Balkans on a false passport, prosecutors said. He’s been locked up since his March 2023 arrest in Montenegro. He was credited for 17 months he spent in jail there before being extradited to the U.S.
Kwon agreed to forfeit over $19 million as part of his plea deal. His lawyers argued his conduct stemmed not from greed, but hubris and desperation. Engelmayer rejected his request to serve his sentence in his native South Korea, where he also faces prosecution and where his wife and 4-year-old daughter live.
“I have spent almost every waking moment of the last few years thinking of what I could have done different and what I can do now to make things right,” Kwon told Engelmayer. Hearing from victims, he said, was “harrowing and reminded me again of the great losses that I have caused.”
One victim, speaking by telephone, said his wife divorced him, his sons had to skip college, and he had to move back to Croatia to live with his parents after TerraUSD’s crash evaporated his family’s life savings. Another said he has to “live with the guilt” of persuading his in-laws and hundreds of nonprofit organizations to invest.
Stanislav Trofimchuk said his family’s investment plummeted from $190,000 to $13,000 — “17 years of our life, gone” during what he described as “two weeks of sheer terror.”
Chauncey St. John, speaking in court, said some nonprofits he worked with lost more than $2 million and a church group lost about $900,000. He and his wife are saddled with debt and his in-laws have been forced to work well past their planned retirement, he said.
Nevertheless, St. John said, he forgives Kwon and “I pray to God to have mercy on his soul.”
A prosecutor read excerpts from some of more than 300 letters submitted by victims, including a person identified only by initials who lost nearly $11,400 while juggling bills and trying to complete college. Kwon had made Terra seem like a safe place to stash savings, the person said.
“To some that is just a number on a page, but to me it was years of effort,” the person wrote. “Watching it evaporate, literally overnight, was one of the most terrifying experiences of my life.”
“What happened was not an accident. It was not a market event. It was deception,” the person added, imploring the judge to “consider the human cost of this tragedy.”
Kwon created an “illusion of resilience while covering up systemic failure,” Assistant U.S. Attorney Sarah Mortazavi told Engelmayer. “This was fraud executed with arrogance, manipulation and total disregard for people.”
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California voters take up Prop 50, a Democratic push for more US House seats
Topics in Legal News |
2025/11/05 06:57
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The national battle to control the U.S. House shifts to California on Tuesday as voters consider a Democratic proposal that could erase as many as five Republican districts and blunt President Donald Trump’s moves to safeguard his party’s lock on Washington power.
The outcome will reverberate into next year’s midterm elections and beyond, with Democrats hoping a victory will set the stage for the party to regain control of the House in 2026. A shift in the majority would imperil Trump’s agenda for the remainder of his term at a time of deep partisan divisions over immigration, health care and the future direction of the nation.
“God help us if we lose in California,” Democratic Gov. Gavin Newsom says.
Democrats need to gain just three seats in the 2026 elections to take control of the House.
Heavily Democratic California and its 52 congressional districts represent by far the Democrats’ best opportunity in an unprecedented state-by-state redistricting battle, which started when Texas Republicans heeded Trump’s demand that they redraw their boundaries to help the GOP retain its House majority. Democrats hold 43 of the state’s seats and hope to boost that to 48.
Trump is fighting not just the Democrats but history. Midterm elections typically punish the party in the White House, but four GOP-led states so far have adopted new district maps to pack more Republican voters into key districts.
Measure supported by Newsom, Obama
California’s Proposition 50 asks voters to suspend House maps drawn by an independent commission and replace them with rejiggered districts adopted by the Democratic-controlled Legislature. Those new districts would be in place for the 2026, 2028 and 2030 elections.
The recast districts aim to dilute Republican voters’ power, in one case by uniting rural, conservative-leaning parts of far northern California with Marin County, a famously liberal coastal stronghold across the Golden Gate Bridge from San Francisco.
The measure has been spearheaded by Newsom, who has thrown the weight of his political operation behind it in a major test of his mettle ahead of a potential 2028 presidential campaign. Former President Barack Obama has urged voters to pass it as well.
Newsom has sought to nationalize the campaign, depicting the proposal as a counterweight to all things Trump.
“Republicans want to steal enough seats in Congress to rig the next election and wield unchecked power for two more years,” Obama says in one ad. “You can stop Republicans in their tracks.”
Critics say two wrongs don’t make a right. They urge Californians to reject what they call a Democratic power grab, even if they have misgivings about Trump’s moves in Republican-led states.
Among the most prominent critics is Arnold Schwarzenegger, the movie star and former Republican governor who pushed for the creation of the independent commission, which voters approved in 2008 and 2010. It makes no sense to fight Trump by becoming him, Schwarzenegger said in September, arguing that the proposal would “take the power away from the people.”
“I don’t want Newsom to have control,” said Rebecca Fleshman, a 63-year-old retired medical assistant from Norco in Southern California, who voted against the measure. “I don’t want the state to be blue. I want it to be red.”
After an early burst of TV advertising, opponents of the plan have struggled to raise cash in a state with some of the nation’s most expensive media markets. Data compiled by advertising tracker AdImpact last week showed Democrats and other supporters with over $5 million in ad buys booked on broadcast TV, cable and radio. But opponents had virtually no time reserved, though the data didn’t include some popular streaming services like Hulu and YouTube or mail advertising.
Total spending on broadcast and cable ads topped $100 million, with more than two-thirds of it coming from supporters. Newsom told people to stop donating in the race’s final weeks.
Trump, who overwhelmingly lost California in his three presidential campaigns, largely stayed out of the fray. A week before the election, he urged voters in a social media post not to vote early or by mail — messaging that conflicts with that of top Republicans in the state who urged people to get their ballots in as soon as possible.
Democrats hope to pick up as many as five seats in California if voters approve the new boundaries, offsetting the five that Republicans hope to pick up through their new Texas maps. Republicans also expect to gain one seat each from new maps in Missouri and North Carolina, and potentially two more in Ohio.
Congressional district boundaries are typically redrawn every 10 years to reflect population shifts documented in the census. Mid-decade redistricting is unusual, absent a court order finding fault with the maps in place.
Five other GOP-led states are also considering new maps: Florida, Indiana, Kansas, Louisiana and Nebraska. On the Democratic side, Colorado, Illinois, Maryland, New York and Virginia have proposals to redraw maps, but major hurdles remain.
A court has ordered new boundaries be drawn in Utah, where all four House districts are represented by Republicans, but it remains to be seen if the state will approve a map that makes any of them winnable for Democrats. |
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US completes deportation of 8 men to South Sudan after weeks of legal wrangling
Topics in Legal News |
2025/07/06 10:14
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Eight men deported from the United States in May and held under guard for weeks at an American military base in the African nation of Djibouti while their legal challenges played out in court have now reached the Trump administration’s intended destination, war-torn South Sudan, a country the State Department advises against travel to due to “crime, kidnapping, and armed conflict.”
The immigrants from Cuba, Laos, Mexico, Myanmar, Vietnam and South Sudan arrived in South Sudan on Friday after a federal judge cleared the way for the Trump administration to relocate them in a case that had gone to the Supreme Court, which had permitted their removal from the U.S. Administration officials said the men had been convicted of violent crimes in the U.S.
“This was a win for the rule of law, safety and security of the American people,” said Homeland Security spokeswoman Tricia McLaughlin in a statement Saturday announcing the men’s arrival in South Sudan, a chaotic country in danger once more of collapsing into civil war.
The Supreme Court on Thursday cleared the way for the transfer of the men who had been put on a flight in May bound for South Sudan. That meant that the South Sudan transfer could be completed after the flight was detoured to a base in Djibouti, where they men were held in a converted shipping container. The flight was detoured after a federal judge found the administration had violated his order by failing to allow the men a chance to challenge the removal.
The court’s conservative majority had ruled in June that immigration officials could quickly deport people to third countries. The majority halted an order that had allowed immigrants to challenge any removals to countries outside their homeland where they could be in danger.
A flurry of court hearings on Independence Day resulted a temporary hold on the deportations while a judge evaluated a last-ditch appeal by the men’s before the judge decided he was powerless to halt their removals and that the person best positioned to rule on the request was a Boston judge whose rulings led to the initial halt of the administration’s effort to begin deportations to South Sudan.
By Friday evening, that judge had issued a brief ruling concluding the Supreme Court had tied his hands.
The men had final orders of removal, Immigration and Customs Enforcement officials have said. Authorities have reached agreements with other countries to house immigrants if authorities cannot quickly send them back to their homelands.
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Japan’s trade minister fails to win US assurances on tariff exemptions
Topics in Legal News |
2025/03/12 23:44
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Japan’s trade minister said this week that he has failed to win assurances from U.S. officials that the key U.S. ally will be exempt from tariffs, some of which take effect on Wednesday.
Yoji Muto was in Washington for last ditch negotiations over the tariffs on a range of Japanese exports including cars, steel and aluminum.
Muto said Monday in Washington that Japan, which contributes to the U.S. economy by heavily investing and creating jobs in the United States, “should not be subject to” 25% tariffs on steel, aluminum and auto exports to America.
His meetings with U.S. Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer and White House economic advisor Kevin Hassett came just two days before the steel and aluminum tariffs are due to take effect. President Donald Trump has also said a possible 25% tariff on imported foreign autos could take effect in early April.
Muto said the U.S. officials acknowledged Japanese contributions and agreed to continue talks, but did not approve his request for Japan’s exemption from the steep import duties.
“We did not receive a response that Japan will be exempt,” Muto told reporters. “We must continue to assert our position.”
As Trump’s tariff threats have triggered tensions and vows of retaliation from Canada, Mexico and China, Japan has been working to firm up ties with other countries.
Last week, the foreign and trade ministers from Japan and Britain gathered in Tokyo for their first “two-plus-two” economic dialogue. They agreed to stand up for “fair, rules-based international trade,” though nobody directly mentioned Trump.
Japan depends heavily on exports and the auto tariffs would hurt, because vehicles are its biggest export and the United States is their top destination.
“Clearly companies in Japan are very concerned,” said Rintaro Nishimura, political analyst and associate at Japan Practice of The Asia Group. “Obviously the auto is the crown jewel for Japan, especially in the context of these tariffs.” He says they are concerned also because the Trump administration is carrying it out in just two months after taking office.
Trump also has criticized Japan’s contributions to the two countries’ mutual defense arrangements, adding to tensions with Tokyo.
Muto said the two sides agreed to keep discussing to find ways to establish a “win-win” relationship that would serve national interests of both countries.
The two sides also discussed energy cooperation, including joint development of liquefied natural gas reserves in Alaska, which Trump and Prime Minister Shigeru Ishiba agreed on during Ishiba’s visit to the White House in February.
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New Hampshire courts hear 2 cases on transgender girls playing girls sports
Topics in Legal News |
2024/11/22 06:20
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Two New Hampshire fathers who were barred from school district events for wearing pink wristbands marked “XX” to represent female chromosomes insisted at a federal court hearing Thursday that they didn’t set out to harass or otherwise target a transgender soccer player at the game they attended.
But a judge hearing the case suggested the message the parents sent may matter more than their intentions.
Kyle Fellers and Anthony Foote sued the Bow school district after being banned from school grounds for wearing the wristbands at their daughters’ soccer game in September. The no-trespass orders have since expired, but a judge is deciding whether the plaintiffs should be allowed to wear the wristbands and carry signs at upcoming school events, including basketball games, swim meets and a music concert, while the case proceeds.
Testifying at Thursday’s hearing, both men said that they did not view the wristbands as a protest against Parker Tirrell, a transgender girl on the opposing team, but rather as a show of support for their daughters and their teammates. U.S. District Court Judge Steven McAuliffe questioned whether there is a meaningful distinction and whether their intentions matter.
“Sometimes the message you think you’re sending might not be the message that is being sent,” he said.
McAuliffe asked Foote whether it occurred to him that a transgender person might interpret the pink XX wristbands as an attempt to invalidate their existence.
“If he’s a trans female, pink might be a color he likes,” Foote said.
McAuliffe also noted that while both plaintiffs said they had no problem with transgender people outside the issue of sports, they repeatedly referred to the athlete in question as a boy.
“You seem to go out of your way to suggest there’s no such thing as a trans girl,” McAuliffe said. Foote disagreed, saying it was “like learning a new language” to refer to transgender people.
In a separate courtroom earlier Thursday, another judge held a hearing on a lawsuit brought by Parker Tirrell and another student challenging the state law that bans transgender athletes in grades 5 to 12 from teams that align with their gender identity. It requires schools to designate all teams as either girls, boys or coed, with eligibility determined based on students’ birth certificates “or other evidence.”
U.S. District Court Chief Judge Landya McCafferty ruled earlier this year that the teens can try out for and play on girls school sports teams. The order only applies to those two individuals for now as they seek to overturn the Fairness in Women’s Sports Act on behalf of all transgender girl students in New Hampshire.
Lawyers for the teens said in court Thursday they hoped the matter could go to trial and be resolved before the start of the next school year in September. They said the teens’ school districts and others in the state have asked for guidance regarding the statute. Lawyers for the state said they needed more time to prepare.
Judge Talesha Saint-Marc suggested the timing of the trial was ambitious and asked that both sides talk further about scheduling. Gov. Chris Sununu, who signed the Fairness in Women’s Sports Act into law in July, has said it “ensures fairness and safety in women’s sports by maintaining integrity and competitive balance in athletic competitions.” About half of states have adopted similar measures.
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