2023 has been a very busy year in the field of cryptocurrencies. Not because of the ups and downs to which digital currencies have accustomed us, but because of the collapse with their companies of three important figures in the history of cryptocurrency: FTX’s Sam Bankman-Fried, Changpeng Zhao (continued known as CZ) with Binance and Do Kwon with the Terra USD cryptocurrency and With LUNA token.

Three ‘Wise Men’ of cryptocurrencies fell from grace in 2023, accused of various fraud, stock fraud or money laundering offenses after their companies were investigated by US tax authorities.

Sam Bankman-Fried, I was such a bad kid cryptocurrencies. He is famous for catering to major investors without taking his eyes off the screen while playing League Of Legends or Starcraft, and for sharing a mansion in the Bahamas with some of his team at FTX and Alameda Research.

All this helped Sam Bankman-Fried gain a reputation as an eccentric young millionaire and become the second richest person before the age of thirty, after Mark Zuckerberg. At his peak, the cryptocurrency wunderkind amassed a fortune of $26.5 billion.

Following the collapse of his financial network, the “cryptocurrency wunderkind” was found guilty of seven counts of money laundering, wire fraud and securities fraud against investors from FTX and Alameda Research. If the sentence is not upheld, Sam Bankman-Fried’s sentence could exceed 110 years.

Do Kwon is the ‘king of crazy’ who left a 40,000 million hole. At the beginning of 2022, South Korean Do Kwon was experiencing a dream come true when the price of the Terra USD stablecoin and LUNA token skyrocketed with returns of over 20%. In those days, Kwon’s fortune at the age of 30 was estimated at about $4 billion.

In May of that year, the savings of hundreds of people, including the CEO of the company backing the cryptocurrency, evaporated, leaving a hole in the coffers estimated today to be between $40,000 and $60,000 million. A fiasco that some experts have likened to the Lehman Brothers debacle that led to a major global financial crisis.

Four months later, South Korean tax authorities issued an international search warrant, joined by the governments of Singapore, where Terraforms Labs is headquartered, and the United States, on charges of various document forgery, securities fraud and fraud crimes.

After months of hiding somewhere in Serbia, Do Kwon was detained at Montenegro airport in March 2023 while trying to catch a flight to Dubai. He was immediately tried before a local court, which found him guilty of forgery of documents for using a false passport. Now, the United States Securities and Exchange Commission and the South Korean prosecutor’s office have requested extradition to the Balkan country, and the country has expressed its support for carrying it out.

If he is eventually extradited to South Korea, the former ‘king of madmen’ faces the longest prison sentence for financial crime in South Korean history. Dan Sung-han, head of the team of South Korean prosecutors, told The Wall Street Journal: “Given the nature of this incident, we believe that investigating the case in South Korea would be the most effective way to bring justice to investors.” .

Changpeng Zhao is an unexpected reference drop for the crypto community. Changpeng Zhao became the latest cryptocurrency baron to fall from grace due to the turbulence that caused the collapse of two major cryptocurrency whales, Sam Bankman-Fried and Do Kwon.

CZ’s case did not require a worldwide escape befitting a secret agent, as in the movie starring Do Kwon, or the publicized downfall of Sam Bankman-Fried. In fact, Zhao’s cooperation with prosecution officials allowed him to be released. But that doesn’t make it any less impactful for the cryptocurrency ecosystem.

The founder of the Binance exchange signed a plea agreement with prosecutors requiring him to step down from management of the company and pay damages and fines worth $4 billion. This deal does not prevent CZ from keeping his shareholding power intact, which gives him a portion of his personal fortune estimated at 29.7 billion.

However, according to New York Times sources, Changpeng Zhao’s nightmare is not over yet, the millionaire may still face some minor crimes, so it is still possible that he will be sentenced to at least 18 months in prison.

in Xataka | Facing pressure from Europe and the USA, the crypto industry has found a new haven: Hong Kong

Image | Wikimedia Commons (BE6_1595, Do Kwon)