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.”

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.

A lawyer for the maker of the video game Call of Duty argued Friday that a judge should dismiss a lawsuit brought by families of the victims of the Robb Elementary School attack in Uvalde, Texas, saying the contents of the war game are protected by the First Amendment.

The families sued Call of Duty maker Activision and Meta Platforms, which owns Instagram, saying that the companies bear responsibility for promoting products used by the teen gunman.

Three sets of parents who lost children in the shooting were in the audience at the Los Angeles hearing.

Activision lawyer Bethany Kristovich told Superior Court Judge William Highberger that the “First Amendment bars their claims, period full stop.”

“The issues of gun violence are incredibly difficult,” Kristovich said. “The evidence in this case is not.”

She argued that the case has little chance of prevailing if it continues, because courts have repeatedly held that “creators of artistic works, whether they be books, music, movies, TV or video games, cannot be held legally liable for the acts of their audience.”

The lawsuit, one of many involving Uvalde families, was filed last year on the second anniversary of one of the deadliest school shootings in U.S. history. The gunman killed 19 students and two teachers. Officers finally confronted and shot him after waiting more than an hour to enter the fourth-grade classroom.

Kimberly Rubio, whose 10-year-old daughter Lexi was killed in the shooting, was among the parents who came from Texas to Southern California, where Activision is based, for the hearing.

“We traveled all this way, so we need answers,” Rubio said outside the courthouse. “It’s our hope that the case will move forward so we can get those answers.”

An attorney for the families argued during the hearing that Call of Duty exceeds its First Amendment protections by moving into marketing.

“The basis of our complaint is not the existence of Call of Duty,” Katie Mesner-Hage told the judge. “It is using Call of Duty as a platform to market weapons to minors.”

The plaintiffs’ lawyers showed contracts and correspondence between executives at Activison and gunmakers whose products, they said, are clearly and exactly depicted in the game despite brand names not appearing.

Mesner-Hage said the documents show that they actually prefer being unlabeled because “it helps shield them from the implication that they are marketing guns to minors,” while knowing that players will still identify and seek out the weapons.

Kristovich said there is no evidence that the kind of product placement and marketing the plaintiffs are talking about happened in any of the editions of the game the shooter played.

The families have also filed a lawsuit against Daniel Defense, which manufactured the AR-style rifle used in the May 24, 2022, shooting. Koskoff argued that a replica of the rifle clearly appears on a splash page for Call of Duty.

Josh Koskoff, the families’ Connecticut-based lead attorney, also represented families of nine Sandy Hook Elementary School shooting victims in a lawsuit against gunmaker Remington and got a $73 million lawsuit settlement.

He invoked Sandy Hook several times in his arguments, saying the shooters there and in Uvalde shared the same gaming obsession.

Koskoff said the Uvalde shooter experienced “the absorption and the loss of self in Call of Duty.”

He said that immersion was so deep that the shooter searched online for how to obtain an armored suit that he didn’t know only exists in the game.

Koskoff played a clip from Call of Duty Modern Warfare, the game the shooter played, with a first-person shooter gunning down opponents.

The shots echoed loudly in the courtroom, and several people in the audience slowly shook their heads.

“Call of Duty is in a class of its own,” Koskoff said.

Kristovich argued for Activision that the game, despite its vast numbers of players, can be tied to only a few of the many U.S. mass shootings.

“The game is incredibly common. It appears in a scene on ‘The Office,’” she said. She added that it is ridiculous to assert that “this is such a horrible scourge that your honor has to essentially ban it through this lawsuit.”

Highberger told the lawyers he was not leaning in either direction before the hearing. He gave no time frame for when he will rule, but a quick decision is not expected.

The judge did tell the plaintiffs’ lawyers that their description of Activision’s actions seemed like deliberate malfeasance, where their lawsuit alleges negligence. He said that was the biggest hurdle they needed to clear.

“Their conduct created a risk of exactly what happened,” Mesner-Hage told him. “And we represent the people who are exactly the foreseeable victims of that conduct.”

Meta’s attorneys will make arguments on a similar motion next month.

Los Angeles students and teachers return to class for the new academic year Thursday under a cloud of apprehension after a summer filled with immigration raids and amid worries that schools could become a target in the Trump administration’s aggressive crackdown.

Los Angeles Unified School District Superintendent Alberto Carvalho has urged immigration authorities not to conduct enforcement activity within a two-block radius around schools starting an hour before the school day begins and until one hour after it classes let out.

“Hungry children, children in fear, cannot learn well,” Carvalho said in a news conference.

He also announced a number of measures intended to protect students and families, including adding or altering bus routes to accommodate more students. The district is to distribute a family preparedness packet that includes know-your-rights information, emergency contact updates and tips on designating a backup caregiver in case a parent is detained.

The sprawling district, which covers more than two dozen cities, is the nation’s second largest with more than 500,000 students. According to the teachers’ union, 30,000 students are immigrants, and an estimated quarter of them are without legal status.

Federal immigration enforcement near schools causes concern

While immigration agents have not detained anyone inside a school, a 15-year-old boy was pulled from a car and handcuffed outside Arleta High School in northern Los Angeles on Monday, Carvalho said.

He had significant disabilities and was released after a bystander intervened in the case of “mistaken identity,” the superintendent said.

“This is the exact type of incident that traumatizes our communities; it cannot repeat itself,” he added.

Administrators at two elementary schools previously denied entry to officials from the Department of Homeland Security in April, and immigration agents have been seen in vehicles outside schools.
DHS did not immediately respond to an email seeking comment.

Carvalho said that while staffers and district police officers cannot interfere with immigration enforcement and do not have jurisdiction beyond school property, they have had conversations with federal agents parked in front of schools that resulted in them leaving.

The district is partnering with local law enforcement in some cities and forming a “rapid response” network to disseminate information about the presence of federal agents, he said.
Educators worry about attendance

Teachers say they are concerned some students might not show up the first day.

Lupe Carrasco Cardona, a high school social studies and English teacher at the Roybal Learning Center, said attendance saw a small dip in January when President Donald Trump took office.

The raids ramped up in June right before graduations, putting a damper on ceremonies. One raid at a Home Depot near MacArthur Park, an area with many immigrant families from Central America, took place the same morning as an 8th grade graduation at a nearby middle school.

“People were crying, for the actual graduation ceremony there were hardly any parents there,” Cardona said.

The next week, at her high school graduation, the school rented two buses to transport parents to the ceremony downtown. Ultimately many of the seats were empty, unlike other graduations.

One 11th grader, who spoke on the condition that her last name not be published because she is in the country without legal permission and fears being targeted, said she is afraid to return to school.

“Instead of feeling excited, really what I’m feeling is concern,” said Madelyn, a 17-year-old from Central America. “I am very, very scared, and there is a lot of pressure.”

She added that she takes public transportation to school but fears being targeted on the bus by immigration agents because of her skin color.

“We are simply young people with dreams who want to study, move forward and contribute to this country as well,” she said.

Madelyn joined a club that provides support and community for immigrant students and said she intends to persevere in that work.