Sam Bankman-Fried (SBF) is guilty: What next for Do Kwon and John Karony?

The biggest crypto story of the year just happened, sending shockwaves across the industry. After a few hours of deliberations, a jury in New York found Sam Bankman-Fried (SBF) guilty of all seven charges against him.

He stood zero chance as the government presented a solid case against him. And most importantly, his former senior executives, including Caroline Elison, had all pleaded guilty and testified against him.

In all, Sam Bankman-Fried faces more than a decade in prison, with most analysts expecting him to serve at least 15 years. He also faces additional charges in New York. For example, he has been accused of making illegal campaign contributions, which could see him get additional years.

Do Kwon could be in trouble

SBF’s verdict sent shivers to two other high-profile crypto executives: Terra’s Do Kwon and Safemoon’s John Karony. Do Kwon, a South Korean faces decades in prison in both his native country and the United States.

He now sits in a prison in Montenegro, where he was caught when fleeing to Dubai. Prosecutors in the two countries accuse him of leading a giant crypto scam that led to over $40 billion in losses. 

The core of the case is that Do Kwon made wrong statements about the safety of TerraUSD, an algorithmic stablecoin. Unlike Tether and USD Coin, the coin was not backed by any fiat currencies. Instead, it maintained its peg through complex computer engineering.

One of the false claims is about Chai, a fintech product popular in South Korea. Do Kwon alleged that the company operated using Terra’s technology. This was an important move since many investors saw it as a good use case for Terra’s platform. While Chai used Terra initially, it stopped in 2020.

Do Kwon is now being held in prison for using forged documents. He will also remain in custody as he goes through the extradition process. Analysts believe that Dow Kwon faces decades in prison as well.

What about John Karony?

John Karony is another crypto executive who is in real trouble with the law. He was arrested this week and faces several charges of embezzlement and securities fraud in New York.

Unlike Do Kwon and SBF, Karony is not a mainstream figure in the crypto industry. He founded Safemoon, a meme coin that became popular in 2021 during the meme coin frenzy. 

Safemoon promised holders remarkable returns by simply buying and holding it. Now, prosecutors allege that Karony and his co-accused spent the money to buy lavish items like vehicles and houses. In all, they spent over $200 million of customer funds. In a statement, the prosecutor said:

“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicle, and real estate.”

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