NEW YORK — Onetime cryptocurrency mogul Do Kwon was sentenced Thursday by a New York judge to 15 years in prison after a $40 billion crash revealed his crypto ecosystem to be a fraud.

Do Kwon, a South Korean national, was behind two digital currencies that collapsed and lost an estimated $40bn ($29.9bn).

He was co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital coins.

Kwon had admitted misleading investors about TerraUSD, a so-called stablecoin that was supposed to maintain its value against the US dollar.

He was one of a number of crypto bosses to face charges in the US after digital tokens slumped in 2022, triggering the failure of several companies.

US District Judge Paul A Engelmayer, who handed down the sentence, said Kwon had repeatedly lied to investors who trusted him with their money.

"This was a fraud on an epic, generational scale," he said during Thursday's court hearing in Manhattan.

"In the history of federal prosecutions, there are few frauds that have caused as much harm as you have."

Kwon, who pleaded guilty in August to conspiracy to defraud and wire fraud, expressed remorse to the judge.

"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," he said.

Prosecutors alleged that when TerraUSD fell below its $1 peg in May 2021, Kwon told investors that a computer algorithm had restored its value.

Instead, Kwon had arranged for a trading firm to secretly buy millions of dollars of the coin to artificially boost its value, according to court documents.

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 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 Engelmayer said at a daylong sentencing hearing 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 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 US Attorney Sarah Mortazavi told Engelmayer. “This was fraud executed with arrogance, manipulation and total disregard for people.” — Agencies