This holiday season isnt quite so merry for American shoppers as large shares are dipping into savings, scouring for bargains, and feeling like the overall economy is stuck in a rut under President Donald Trump, a new AP-NORC poll finds.
The vast majority of U.S. adults say theyve noticed higher than usual prices for groceries, electricity, and holiday gifts in recent months, according to the survey from The Associated Press-NORC Center for Public Affairs Research.
Roughly half of Americans say its harder than usual to afford the things they want to give as holiday gifts, and similar numbers are delaying big purchases or cutting back on nonessential purchases more than they would normally.
It’s a sobering assessment for the Republican president, who returned to the White House in large part by promising to lower prices, only to find that inflation remains a threat to his popularity just as it did for Democrat Joe Biden’s presidency. The polls findings look very similar to an AP-NORC poll from December 2022, when Biden was president and the country was grappling with higher rates of inflation. Trump’s series of tariffs have added to inflationary pressures and generated anxiety about the stability of the U.S. economy, keeping prices at levels that many Americans find frustrating.
The president has insisted there is no inflation and the U.S. economy is booming, as he expressed frustration that the public feels differently.
When will people understand what is happening? Trump said Thursday on Truth Social. When will Polls reflect the Greatness of America at this point in time, and how bad it was just one year ago?
Most U.S. adults, 68%, continue to say the countrys economy is poor, which is unchanged from December 2024, before Trump returned to the presidency.
Americans are feeling strained as they continue to see high prices
White House officials plan to send Trump barnstorming across the country in hopes of bucking up people’s faith in the economy before next year’s midterm elections. But the president this week in Pennsylvania defended the price increases tied to his tariffs by suggesting that Americans should buy fewer dolls and pencils for children. His message is a jarring contrast with what respondents expressed in the poll, even among people who backed him in the 2024 election.
Sergio Ruiz, 44, of Tucson, Arizona, said he is using more buy now, pay later programs to spread out over time the expense of gifts for his children. He doesn’t put a huge emphasis on politics, but he voted for Trump last year and would like to see lower interest rates to help boost his real estate business. He believes that more Americans having higher incomes would help to manage any affordability issues.
Prices are up. What can you do? You need to make more money, Ruiz said.
The poll found that when they do shop, about half of Americans are finding the lowest price more than they would normally. About 4 in 10 are dipping into their savings more than at other times.
Democrats are more likely than Republicans to say theyre cutting back on expenses or looking for low prices, but many Republicans are budgeting more than usual as well. About 4 in 10 Republicans are looking for low prices more than they usually would, while a similar share are shopping for nonessential items less than usual.
Views are largely similar to when Biden was president
People felt similarly dismal about holiday shopping and the economy when Biden was president in 2022. Inflation had spiked to a four-decade high that summer. Three years later, inflation has eased substantially, but it’s still running at 3%, a full percentage point above the Federal Reserve’s target as the job market appears to have entered a deep freeze.
The survey indicates that it’s the level of prices and not just the rate of inflation that is the point of pain for many families. Roughly 9 in 10 U.S. adults, 87%, say they’ve noticed higher than usual prices for groceries in the past few months, while about two-thirds say they’ve experienced higher prices than usual for electricity and holiday gifts. About half say they’ve seen higher than normal prices for gas recently.
The findings on groceries and holiday gifts are only slightly lower than in the 2022 poll, despite the slowdown from an inflation rate that hit a four-decade peak in the middle of that year.
Consumer spending has stayed resilient despite the negative sentiments about the economy, yet Trump’s tariffs have caused changes for shoppers such as Andrew Russell.
The 33-year-old adjunct professor in Arlington Heights, Illinois, said he used to shop for unique gifts from around the globe and buy online. But with the tariffs, he got his gifts locally and this year, I only bought things that I can pick up in person, he said.
Russell, who voted Democratic in last year’s election, said he worries about the economy for next year. He thinks the investment in artificial intelligence has become a bubble that could burst, taking down the stock market.
Little optimism about an economic rebound in 2026
Few people expect the situation to meaningfully improve next year a sign that Trump has done little to instill much confidence from his mix of tariffs, income tax cuts and foreign trips to attract investments. Trump has maintained that the benefits from his policies will begin to snowball in 2026.
About 4 in 10 U.S. adults expect next year will be economically worse for the country. Roughly 3 in 10 say condiions wont change much. Only about 2 in 10 think things will get better, with Republicans being more optimistic.
The belief that things will get better has slipped from last year, when about 4 in 10 said that 2025 would be better than 2024.
Millicent Simpson, 56, of Cleveland, Ohio, said she expects the economy to be worse for people like her who rely on Medicaid for health care and the Supplemental Nutrition Assistance Program. Simpson voted Democratic last year and blames Trump for the greater economic pressures that she faces going into the winter.
Hes making it rough for us, she said. Hes messing with the government assistance for everybody, young and old.
___
The AP-NORC poll of 1,146 adults was conducted Dec. 4-8 using a sample drawn from NORCs probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for adults overall is plus or minus 4 percentage points.
Josh Boak and Amelia Thomson-Deveaux, Associated Press
I personally can never bring myself to tell people that Id rather forgo their gift and just get cash insteador better yet, a Venmo. It feels almost too blunt, a cheap shot. So each year, when I unwrap another pair of socks, I smile through gritted teeth.
I feel a twinge of guilt in admitting it. But, to my relief, it appears Im not the only one.
A new Wells Fargo survey finds younger generations are driving a shift toward digital cash gifts, choosing convenience and flexibility over traditional wrapped presents. A staggering 45% of Gen Z and 42% of millennials say theyd rather receive digital payments, compared with 27% of Gen X and just 10% of baby boomers.
I feel like were influenced by older generations, Steve Selfridge, Wells Fargos product management director, said to USA Today. Were kind of taught its not OK to ask for money.
Physical gifts are still popularbut money is quickly catching up. About 48% of gift recipients prefer cash or checks, and 29% would like digital payments through Venmo, Zelle, PayPal, or Cash App.
Gift-givers arent quite as enthusiastic about it: Only 34% enjoy giving cash or checks, and 18% digital payments. Among younger gift-givers, 32% of Gen Z and 28% of millennials are comfortable sending digital cash, compared to 11% of Gen X and 7% of baby boomers.
Its not just you, asking for money is awkward
Ive even tried practicing a polite, non-offensive script for requesting money from my family for Christmasbut when the moment comes, it just feels uncomfortably awkward.
Survey data backs this up: More than half of gift-givers say sending digital cash feels impersonal, and nearly half of recipients admit theyd appreciate it, but feel weird asking.
Still, the perks are hard to ignore: 65% of consumers agree that receiving digital cash gives them freedom to choose what they really want, and the same number cite gifting it as convenientno wrapping, postage, or shipping stress.
Roughly a third also say they appreciate digital gifts because they usually dont like most physical presents, and 32% would like to give money digitally but arent sure its socially acceptable.
So next time youre stuck on what to gift a Gen Zer, it might be simpler than you think: Just send them money.
If the holiday hustle and bustle is stressing you out, the night sky is providing a perfect moment to pause and wonder at some majesty this weekend, as the Geminid meteor shower (Geminids) is set to peak.
The Geminids are technically active annuallythis year, from around December 1 through 21, and the action peaks on the evenings of the 12th and 13th.
Lets take a look at the science and history behind this cosmic phenomenon, before we dive into how best to view it.
When was the Geminid meteor shower first discovered?
These days, the Geminid meteor shower is considered by NASA to be one of the best and most reliable annual meteor showers.
The event started much smaller. The meteors were first observed in the mid-1800s and only boasted 10-20 meteors an hour.
As time went on, Jupiter got in on the action. The planets gravity pulled the show closer to Earth.
What causes the Geminids?
It wasnt until the 1980s that scientists understood the cause of the meteor shower was asteroid 3200 Phaethon.
Typically, meteor showers are caused by a comet. Asteroid 3200 Phaethon acts like a comet, despite most asteroids taking 1.4 years to fully orbit the sun.
Scientists are still learning about this unique space object. A 2023 article, published in Planetary Science Journal by California Institute of Technology PhD student Qicheng Zhang, stated that when the asteroid approaches the sun, it forms a sodium-gas tail instead of dust.
This challenges earlier beliefs about the object. It is now hypothesized that the dense Geminid meteoroids are a result of a possible past mass loss, not an ongoing tail shedding around the sun.
Regardless, the average person will delight in the vivid burst of light as the meteoroids burn up in Earths atmosphere.
How best to see the Geminids
Scientists and night-sky enthusiasts can agree that whatever label you assign 3200 Phaethon, it puts on one heck of a show.
This years offerings are best seen in the northern hemisphere, although some meteors will be visible to the southern hemisphere as well.
The moon is also cooperating, as it will be in its waning crescent moon phase and not shining too brightly.
When nightfall comes on December 12 and 13, find the darkest place you can, away from city lights. Special viewing equipment such as binoculars or telescopes are not necessaryespecially since meteors move quickly.
The action originates around the Gemini constellation, but you should not just focus there. Look at the entire night sky.
If you do miss the peak viewing time, the days around the December 12 and 13 peak should still offer quite a show.
Wealthfront Corp. is looking to rake in the wealth after going public on Friday.
The Palo Alto-based automated digital wealth platform raised $486 million after selling 43.6 million shares, putting the companys valuation at roughly $2 billion.
Wealthfront shares began trading on the Nasdaq under the ticker WLTH. The company made more than 34.6 million shares of common stock available for the IPO for $14an offering that expires on Monday, December 15.
The stock was up around 4% by mid-afternoon on Friday afternoon after trading began.
To mark the occasion, the companys leadershipincluding CEO David Fortunato, cofounder and chairman Andy Rachleff, and cofounder Dan Carrollrang the opening bell at Nasdaq MarketSite in Times Square.
Courting Gen Z and millennial investors
The listing has been a long time coming. Wealthfront was founded in 2008 under the name KaChing. In 2011, it was reborn as Wealthfront, and over the past decade or so, has become known for its automated investment products and servicessomething young investors have found particularly alluring.
Wealthfront refers to these consumers as “digital natives,” defining them as people born after 1980. The fintech also offers other financial products, such as high-yield savings accounts, and will soon start offering home lending services.
Its filing documents with the Securities and Exchange Commission (SEC) show that the company has $88 billion in assets under management. For the six months ended July 31, it had net income of nearly $61 million on revenue of almost $176 million.
In an interview with Yahoo Finance on Friday, Fortunato said that the company will remain competitive in a tight market for a key reason: Wealthfront can offer many of the same services as traditional banks but at lower costs. [Customers] are going to be able to invest, save, and borrow from Wealthfront at a better cost than they would otherwise, he said.
He added that attracting customers early and sticking with them for the long haul has helped position Wealthfront for growth.
Our goal is to compound with our clients for decades,” he said.
Wealthfront joins other large fintech companies in going public this year, including Chime Financial and Klarna Group.
Since its IPO in June, Chime shares are down more than 23%, and Klarna, which went public in September, has seen its shares fall by almost 28%.
Time magazine has named the Architects of AI as its 2025 Person of the Year, a decision that has sparked significant backlash from gamblers who lost out on semantics.
The companies behind AI tools and infrastructure arent AI in the literal sense, so prediction markets Kalshi and Polymarket ruled that anyone betting on AI doesnt win. As author Parker Molloy pointed out on Bluesky, gamblers on the site are not pleased.
Someone please explain to me how this is not a trick? one user complained after betting on billionaire Elon Musk on Kalshi. Person of the year is a singular title
ThE aRcHiTeCtS oF AI, another user wrote. Fuck you pay me.
Others remained insistent that the platform owes them a payout. This pretty clearly shouldve resolved to yes, one user wrote. If you bought AI, reach out to Kalshi support because AI is literally on the cover and in the title Architects of AI.’
On Kalshi, anyone who bet on any of the Architects of AIincluding Sam Altman, Elon Musk, Jensen Huang, Dario Amodei, Mark Zuckerberg, Lisa Su, and Demis Hassabisstill won the bet. Those who bet their products, however, did not.
People who bet on this on Kalshi are not pleased. Lol— Parker Molloy (@parkermolloy.com) 2025-12-11T16:19:54.852Z
Polymarket explained the decision in a note. This market is about the person/thing named as TIME’s Person of the Year for 2025, not what is depicted on the cover. Per the rules, If the Person of the Year is Donald Trump and the MAGA movement, this would qualify to resolve this market to Trump. However if the Person of the Year is The MAGA movement, this would not qualify to resolve this market to Trump regardless of whether Trump is depicted on the cover, it said.
Accordingly, a Time cover which lists Architects of AI as the person of the year will not qualify for AI even if the letters AI are depicted on the cover, as AI itself is not specifically named.
People spent more than $19 million betting on the Time Person of the Year on Kalshi and more than $55 million betting on the Time Person of the Year on Polymarket. I cant believe an unregulated gambling market let people bet frivolously and then took all their money, one Bluesky user mused.
President Donald Trump was sued on Friday by preservationists asking a federal court to halt his White House ballroom project until it goes through multiple independent reviews and wins approval from Congress.
The National Trust for Historic Preservation is asking the U.S. District Court to block Trumps White House ballroom project, which already has involved razing the East Wing, until it goes through comprehensive design reviews, environmental assessments, public comments, and congressional debate and ratification.
The National Trust, a privately funded organization, argues that Trump, by fast-tracking the project, has committed multiple violations of the Administrative Procedures Act and the National Environmental Policy Act, while also exceeding his constitutional authority by not seeking congressional approval for a project of such scale.
No president is legally allowed to tear down portions of the White House without any review whatsoevernot President Trump, not President Biden, and not anyone else, the lawsuit states. And no president is legally allowed to construct a ballroom on public property without giving the public the opportunity to weigh in.
No more work should be done, the Trust argues, until administration officials complete the required reviewsreviews that should have taken place before the Defendants demolished the East Wing, and before they began construction of the Ballroomand secure the necessary approvals.
White House press secretary Karoline Leavitt did not immediately respond to Associated Press questions about the lawsuit and the project, including whether the president had any intention of consulting Congress. Trump has emphasized since announcing his plans that hes doing it with private funding, including his own money. But that would not necessarily change how federal laws and procedures apply to what is still a U.S. government project.
Trump, a Republican, already has bypassed the federal governments usual building practices and historical reviews with the East Wing demolition. He recently added another architectural firm for a ballroom that itself would be nearly twice the size of the White House before the East Wings demolition.
Trump has said a ballroom is overdue for the White House, previously complaining that events were held outside under a tent because the East Room and the State Dining Room could not accommodate bigger crowds. Trump, among other complaints, said guests get their feet wet if it rains during such events.
The White House is expected to submit plans for Trumps new ballroom to a federal planning commission before the year ends, about three months after construction began.
Will Scharf, who was named by Trump as chairman of the National Capital Planning Commission, said at the panels monthly meeting last week that he was told by colleagues at the White House that the long-awaited plans would be filed in December.
Once plans are submitted, thats really when the role of this commission, and its professional staff, will begin, said Scharf, who also is one of the Republican presidents top White House aides.
He said the review process would happen at a normal and deliberative pace.”
By Bill Barrow, Associated Press
The holiday season means time with family and new memories, but it can also mean lots of spendingsometimes too much.
From gifts to travel plans to grocery shopping, costs can pile up and become overwhelming, especially in a difficult economic environment. Holiday shopping can bring joy, but its important to stick to a budget and avoid going into debt, said shopping expert Trae Bodge.
Im really emphasizing that shoppers look for ways to save as much as possible this season. So we dont bring that debt into the next year, Bodge added.
Here are some expert recommendations to make the most out of your budget this holiday season:
Plan your gift list and shop around
Planning your gifts as far in advance as possible can be a great way to save money, since it gives you more time to compare and shop around, said Kiersti Torok, a social media content creator known on Instagram and TikTok as Torok Coupon Hunter.
Torok plans her shopping months in advance. She buys the chocolate and candy for her childrens Christmas stockings right after Halloween, when theyre on sale. And it’s not too early to think about next year her Christmas decorations are always bought on clearance, especially after Christmas.
If you wait until two, maybe three, days after Christmas. Things will start to hit 75% off. And thats when I shop for my kids birthdays, because theyre in July, Torok said.
Compare prices
When youre looking to buy a gift, Bodge recommends comparing prices with other stores, looking for coupons, and signing up for emails from your favorite stores. That way, you can buy the item when its at its lowest price.
Im always looking for maybe a coupon code, so I can save a certain percentage off. Or I can earn cash back or get a free shipping offer. I really believe in those tools and use them every single time I shop, Bodge said.
To find deals more easily, Bodge recommends installing browser extensions on your computer. Some of her favorites are PayPal Honey and Rakuten.
Lately, Bodge has also noticed the increasing use of artificial intelligence to both find holiday gift ideas and sales. However, AI search engines are not very good at finding up-to-date deals, she said. Bodge recommends that you search for deals on the stores website or on sites like RetailMeNot.
If you cant find an item on sale, find a coupon, or wait to see if you can find it cheaper somewhere else.
Save on groceries by using coupons
If you’re the host of your family’s holiday celebration, you might be rushing between going to the grocery store, cooking a large meal and decorating your house. But, it’s best if you don’t let the holiday rush distract you from saving on groceries. Coupons are a great way to reduce costs so you can keep your meals on budget, and possibly use that money for other expenses. Most grocery stores offer coupons, either in paper form, on their website, or in their apps.
Couponing can be time-consuming, but the tradeoff can be saving hundreds of dollars on groceries, according to Torok. If youre trying couponing for the first time, she recommends taking small steps.
If youre looking to save money and you never couponed before, my biggest advice is to pick your favorite store youre most comfortable with and download their app, Torok said.
Once you feel comfortable using coupons with your preferred store, Torok recommends that you start comparing prices with other stores near you. This way you can shop for the best deals and save money.
If youre looking to maximize your savings, she also recommends taking advantage of websites that give you cash back on your grocery shopping. Examples include Top Cash Back and Ibotta.
Buy in bulk and stock up on groceries
When preparing for your big holiday meal, a useful tactic to save is to buy in bulk and then freeze it for when you need it, recommended Alli Powell, grocery shopping expert.
Anything that you can stock up on and freeze at a (lower) price point, then take it out of the freezer to use later, itll be such a benefit. This is something I try to do year-round, said Powell, who hosts Grocery Getting Girl, a blog and Instagram page dedicated to budget-friendly grocery shopping.
Large grocery stores typically offer sales around Thanksgiving, Christmas and New Years, and this can be a perfect opportunity to buy in bulk and put it away for another time, Powell said.
Be careful with store credit cards and buy now, pay later deals
Proceed with caution when it comes to acquiring store credits cards or making purchases using buy now, pay later. If youre shopping in person this holiday season, youll likely be offered a store credit card at checkout, often paired with a large discount on your current purchase.
Bodge recommends that you only get a store credit card if you know you can pay it off in full each month and have good credit card habits.
If theres a retailer that you shop with regularly and you are responsible with your credit cards, opening a credit card can be very beneficial, Bodge said.
If you decide to acquire a store credit card, its important that you know how much interest will be charged. Store credit cards, like traditional credit cards, affect your credit score.
Similarly, making purchases using buy now, pay later is only recommended when you are sure you can afford to make all the payments on time. Buy now, pay later loans were not previously reported to the three major credit reporting bureaus, but consumers will soon see the them impact their FICO credit scores.
When it comes to travel, flexibility pays
A common mistake when making travel plans is to not allow yourself much flexibility on your flights, said Kyle Potter, editor of Thrifty Traveler, a travel and flight deal website. To save money on your travel, first book the flights and then the rest of the accommodations, that way you can allow yourself to be as flexible as possible with the dates of your flights.
Start with the flights first, becuse that gives you the freedom to shift your travel dates by even just a day. Especially over the holidays, Potter said.
Potter recommends that you track prices and set alarms for flights on Google Flights.
___
The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
Adriana Morga, Associated Press
This week, a new fashion boutique quietly opened in SoHo. Much like its neighbors, H&M and American Eagle, the new shop features racks of affordably priced, trendy apparel. You’d be forgiven for thinking it was another fast fashion label, but it’s not: it’s Target.
Target has retrofitted its existing SoHo store as a “design-forward concept store,” with a focus on fashion and beauty. The store’s entrance, which features a long hallway drenched in the brand’s iconic red, is full of racks with sparkly skirts and faux-fur jackets for holiday parties. Target has dubbed this area “The Drop” and will feature new, seasonal merchandise that is updated every six to eight weeks. The brand says it will refresh the area with wellness-focused products for New Year’s resolutions in January, and giftable items for Valentine’s Day in February.
[Photo: Target]
The store offers a glimpse into what Target might be cooking up in its efforts to engineer a much-needed turnaround. This past year was calamitous for Target, capping off several years of decline. It began with a boycott, led by Black consumers, who felt that the retailer had let them down by purporting to support diversity in the aftermath of George Floyd’s murder, then dropping most of its diversity, equity, and inclusion efforts when Trump was elected. Last month, it reported a drop in quarterly sales, after four years of flat revenue. In the company’s earnings call, incoming CEO Michael Fiddelke (who is set to replace Brian Cornell in February) declined to say when Target’s sales were likely to turn positive again.
(We reached out to Target for commentary, but it did not make a spokesperson available by the time of publication.)
[Photo: Target]
As I’ve written before, Target’s struggles don’t stem from a single problem. Stores have become disorganized, checkout lines are long. Groceries are an important way to get customers into stores, but they make up less than a quarter of Target’s overall business (as compared to 60% of Walmart’s). And more broadly, Target’s customer base of well-heeled, urban consumers no longer think of it as “Tar-zhay,” the place to buy elevated, well-designed products at an affordable price.
Fiddelke has the difficult task of getting Target out of this position. In August, when he was appointed as the next CEO, he articulated three strategies for cleaning up the mess: improving the in-store experience, incorporating technology to improve efficiency, and turning Target back into a destination for style and design. The new concept store in New York appears to be one effort toward reminding Target that it was once the go-to big box store for a trendy outfit.
[Photo: Target]
The power of design
It makes sense that Fiddelke is looking to design to help steer Target out of this rough patch. After all, design is arguably what enabled Target to become one of the country’s top big box retailers in the early 2000s. But the world has changed over the last two decades, and it’s unclear whether the strategy will allow Target to stand out now.
Target first came up with the idea of democratizing great design in 1999, when it launched a multiyear partnership with the architect Michael Graves on a collection of elevated home goods at affordable prices. The sales of the first line weren’t spectacular, but Target was committed to the concept, and over time, sales took off, elevating the retailer’s image. Over the next two decades, Target collaborated with the top fashion designers of the era, from Proenza Schouler to Anna Sui to Missoni. This coincided with a period of steady growth in the 2000s and early 2010s, and led to a loyal customer base.
But Target no longer corners the market on democratic design. Many other retailers have taken a page from Target’s successful playbook of partnering with designers. High-low designer collabs are now a fixture of fast fashion brands like H&M, Zara, and Uniqlo. And now, Target’s biggest competitorWalmartis stepping up its game, when it comes to fashion. In 2021, Walmart hired the designer Brandon Maxwell to redesign two of its in-house fashion lines and has been popping up at New York Fashion Week for the last three years to signal that it wants to be a contender in the fashion landscape.
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 scams 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 governments recommendation of 12 years in prison was unreasonably lenient and that the defenses 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.
More than the combined losses in FTX and OneCoin cases
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 Greenwoods 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. Hes 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.
Victims say losses ruined their lives, harmed charities
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 TerraUSDs crash evaporated his familys 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 familys 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.
Michael R. Sisak, Associated Press
Associated Press reporter Anthony Izaguirre contributed to this report.
A federal appeals court on Thursday backed a ruling that held Apple in civil contempt for brazenly defying an order designed to open its iPhone app store to other payment systems besides its own, but the decision also reopened a door for the company to collect commission from the rival options.
The unanimous decision by a three-judge panel for the Ninth Circuit Court of Appeals mostly validated a scalding contempt order issued in April by U.S. District Judge Yvonne Gonzalez Rogers for violating a key part of her September 2021 findings in a legal battle instigated by video game maker Epic Games.
But the Ninth Circuit’s 54-page decision overturned one key part of Gonzalez Rogers’ civil contempt crackdown that prohibited Apple from collecting commissions when consumers make an e-commerce purchase within an iPhone app through a payment systems that operate outside of Apple’s control.
The appeals judges decided the ban that would have prevented Apple from imposing fees on rival payment options was too severe and ordered Gonzalez Rogers to reopen the case to determine a fair commission rate that the Cupertino, California, company, can charge. The ruling provided some general guidelines for how Gonzalez Rogers might determine a fair commission on external payment systems, but didn’t make any suggestions about what the percentage might be.
Neither Apple nor Epic immediately responded for requests for comment late Thursday.
But the appeals decision agreed Apple had made a mockery of Gonzalez Rogers attempt to create more payment competition in the iPhone app store as part of a case that began in 2020. Thats when Epic, the maker of the Fortnite video game, filed a lawsuit alleging Apple had set up a price-gouging system within the iPhone app store that had turned into an illegal monopoly.
Epic’s case targeted Apple’s iron-clad control over all its devices and software an approach that has become known as the company’s walled garden.
As part of the strategy, Apple required all in-app purchases on iPhones to be made through its own payment processing system while collecting commissions ranging from 15% to 30%. Those commissions have become a huge moneymaker within a services division that brings in more than $100 billion in annual revenue for Apple.
Although Gonzalez Rogers rejected Epic’s assertion that the iPhone app store had turned into an illegal monopoly in her 2021 decision, she ordered Apple to allow links to alternative payment options to be displayed within apps.
Apple continued to fight the alternative payment option in appeals before being rebuffed by the U.S. Supreme Court in January 2024.
The company then announced it would charge commissions ranging from 12% to 27% on iPhone app purchases made on alternative payment options rates that remained so high that few developers decided to offer other choices.
That prompted Epic to allege Apple was in contempt of court, a claim Gonzalez Rogers embraced after a series of testy court hearings last year and earlier this year that led her to conclude the company’s efforts to allow alternative payment systems into the iPhone app store was little more than a sham.
Michael Liedtke, AP technology writer
