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Cryptocurrency mogul Do Kwon is scheduled to be sentenced Thursday for misleading investors who lost billions when his companys crypto ecosystem collapsed in 2022. Kwon, known by some as the cryptocurrency king, pleaded guilty in Manhattan federal court in August to fraud charges stemming from Terraform Labs $40 billion crash. The company had touted its TerraUSD as a reliable stablecoina kind of currency typically pegged to stable assets to prevent drastic fluctuations in prices. But prosecutors say it was all an illusion that came crumbling down, devastating investors and triggering a cascade of crises that swept through cryptocurrency markets. Kwon, who hails from South Korea, has agreed to forfeit over $19 million as part of the plea deal. While federal sentencing guidelines would recommend a prison term of about 25 years, prosecutors have asked the court to sentence Kwon to 12 years. They cited his guilty plea, the fact that he faces further prosecution in Korea, and that he has already served time in Montenegro while awaiting extradition. Kwons fraud was colossal in scope, permeating virtually every facet of Terraforms purported business, prosecutors wrote in a recent memo to the judge. His rampant lies left a trail of financial destruction in their wake. Kwon’s attorneys asked that the sentence not exceed five years, arguing in their own memo that his conduct stemmed not from greed, but hubris and desperation. In a letter to the judge, Kwon wrote, I alone am responsible for everyones pain. The community looked to me to know the path, and I in my hubris led them astray, while adding, I made misrepresentations that came from a brashness that is now a source of deep regret. Authorities said investors worldwide lost money in the downfall of the Singapore crypto firm, which Kwon cofounded in 2018. Around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg. Kwon was extradited to the U.S. from Montenegro after his March 23, 2023, arrest while traveling on a false passport in Europe.
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Some of the countrys most prestigious colleges are enrolling record numbers of low-income students a growing admissions priority in the absence of affirmative action. America’s top campuses remain crowded with wealth, but some universities have accelerated efforts to reach a wider swath of the country, recruiting more in urban and rural areas and offering free tuition for students whose families are not among the highest earners. The strategy could lead to friction with the federal government. The Trump administration, which has pulled funding from elite colleges over a range of grievances, has suggested its illegal to target needier students. College leaders believe theyre on solid legal ground. At Princeton University, this year’s freshman class has more low-income students than ever. One in four are eligible for federal Pell grants, which are scholarships reserved for students with the most significant financial need. That’s a leap from two decades ago, when fewer than 1 in 10 were eligible. The only way to increase socioeconomic diversity is to be intentional about it,” Princeton President Christopher Eisgruber said in a statement. Socioeconomic diversity will increase if and only if college presidents make it a priority. Last year, Princeton set aggressive goals to recruit more low-income students in the wake of the Supreme Court’s ban on affirmative action in higher education. Without the ability to consider race, officials wrote in a campus report, focusing on economic diversity offers the universitys greatest opportunity to attract diverse talent.” The country’s most selective colleges still enroll large proportions of students from the wealthiest 1% of American families. Many of those campuses have tried for years to shed reputations of elitism, with only gradual changes in enrollment. Colleges set records for enrollment of low-income students Only a small fraction of the nations colleges have publicly disclosed their low-income enrollments this year, and national data wont be released by the federal government until next year. But early numbers show a trend. At 17 highly selective colleges that have released new data, almost all saw increases in Pell-eligible students between 2023 and this year, according to an Associated Press analysis. Most saw increases in consecutive years, and none saw a significant decrease in aggregate over the two years. Yale, Duke, Johns Hopkins, and the Massachusetts Institute of Technology all have set enrollment records for Pell-eligible students in the past two years. Part of the uptick owes to a federal expansion that made more students eligible for Pell grants last year. But campus leaders also believe the increases reflect their own efforts. The numbers in MITs freshman class have climbed by 43% over the past two years, and low-income students account for more than a quarter of this years class. MIT officials cited its policy providing free tuition for families that earn less than $200,000 a year. MIT has always been an engine of opportunity for low-income students, and we are dedicated to ensuring we can make an MIT education accessible for students from every walk of life,” Stu Schmill, MITs dean of admissions, said in a statement. Nationwide, roughly a third of undergraduate students have received Pell grants in recent years. Two years ago, Amherst College in Massachusetts made tuition free for students in the bottom 80% of U.S. earnings. It also started covering meals and housing for those below the median income, and it stopped prioritizing children of alumni and donors in admissions decisions. Since then, low-income enrollment has risen steadily, reaching 1 in 4 new students this year. At the same time, the admissions office has stepped up recruiting in overlooked parts of the country, from big cities to small towns. When we go out and talk to students, its not in the fanciest ZIP codes,” said Matthew McGann, dean of admissions. Its in places where we know theres a lot of talent but not a lot of opportunity. Racial diversity does not necessarily follow economic diversity On many campuses, officials hoped the focus on economic diversity would preserve racial diversity Black, Hispanic, and Indigenous Americans have the country’s highest poverty rates. But even as low-income numbers climb, many elite campuses have seen racial diversity decrease. Without the emphasis on income, those decreases might have been even steeper, said Richard Kahlenberg, a researcher at the Progressive Policy Institute who advocates for class-based affirmative action. He called the latest Pell figures a significant step in the right direction. Economic diversity is important in its own right, he said. It’s important that Americas leadership class which disproportionately derives from selective colleges include people who’ve faced economic hardships in life. Swarthmore College saw the most dramatic leap in Pell enrollment, jumping from 17% to 30% last year. While many campuses were delaying scholarship decisions until the government resolved problems with a new financial aid form, Swarthmore used other data to figure out applicants financial need. That allowed Swarthmore to offer scholarships to students while they were still awaiting decisions from other schools. More financially disadvantaged students ended up enrolling at Swarthmore than officials expected. College leaders also credit their work to reduce campus costs laundry is free and students get yearly credits for textbooks, for example. Yet Swarthmore saw its Black enrollment fall to 5% of its freshman class this year, down from 8% the year before. In a race neutral environment, those numbers are likely to drop,” Jim Bock, the admissions dean, said in a statement. Not all minority students are low-income, and not all majority students have significant financial means.” The approach risks federal scrutiny In legal memos, the White House has alleged that prioritizing students based on earnings or geography amounts to a racial proxy in violation of the Supreme Court’s 2023 decision against affirmative action. In a June letter, Trump officials accused the University of California-Los Angeles of race-based admissions in all but name.” It criticized UCLA for considering factors like applicants’ family income, ZIP code, and high school profile. Colleges ften weigh that kind of information in admissions decisions. Yet the Trump administration has declared that the Supreme Court decision outlaws a wide range of long-accepted education practices, including scholarships targeting students in underserved areas. Already, there are signs of an impact. Earlier this year, the College Board the nonprofit that oversees the SAT suddenly discontinued an offering that gave admissions offices a wealth of information about applicants, including earnings data from their neighborhoods. Kahlenberg and others see it as a retreat in the face of government pressure. The College Board offered little explanation, citing changes to federal and state policy around the use of demographic information in admissions. ___ The Associated Press education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Collin Binkley, AP education writer
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E-Commerce
Welcome to AI Decoded, Fast Companys weekly newsletter that breaks down the most important news in the world of AI. Im Mark Sullivan, a senior writer at Fast Company,covering emerging tech, AI, and tech policy. This week, Im focusing on Nvidias up-and-down fortunes stemming from Jensen Huangs close relationship with Trump. I also look at some reported infighting over AI at Meta, and at the reasons for data centers in space. Sign up to receive this newsletter every week via email here. And if you have comments on this issue and/or ideas for future ones, drop me a line at sullivan@fastcompany.com, and follow me on X (formerly Twitter) @thesullivan. China may not want (many) Nvidia H200 chips after all Nvidia appeared to have scored a major coup when President Trump on Monday wrote on Truth Social that the U.S. government would allow the sale of its powerful H200 AI chips to China. Previously, the chip company lobbied its way to an approval to sell its older and weaker H20 chip in Chinathe worlds second-largest economy and a hotbed of AI and robotics researchbut President Xi Jinping told Chinese firms not to buy them, citing security reasons. The administrations favor to Nvidia came with some conditions. The U.S. would get a 25% cut of the Chinese sales, and the chips would undergo a security review before their export. And Nvidias most powerful chips, the Blackwell GPU, would remain banned from export to China. But Nvidia still stood to make a lot of money selling the H200s. Now reports say that the Chinese government plans to restrict the import of the H200s, allowing only a small set of trusted Chinese companies or research organizations to get them. Reuters reports that Alibaba and ByteDance want to order H200s but are waiting for a final decision from the Chinese government. Xi wants Chinese companies to use chips from domestic companies such as Huawei, which could help the Chinese chip companies catch up with Nvidia in a technological sense. The Information reports that the Chinese government sees the H200s as a stopgap solution in the meantime. The Chinese also have serious concerns about the security of the H200s, amplified no doubt by the chance that agents of the U.S. government might install security backdoors or location tracking codes in the chips during the security review. Huang reportedly talks to Trump on the phone regularly and has written checks for things like Trumps new ballroom at the White House. The downside of embracing Trump so openly and unconditionally may have eroded trust for Nvidia in China. In the past, China has mounted state-sponsored or grassroots boycotts against American companies, including Apple, McDonalds, and the NBA. And there are other ways of getting Nvidia chips into China. The Information reports that the Chinese AI lab DeepSeek has been using thousands of Nvidias Blackwell chips (the most powerful in the world for AI) to train its newest model. Chinese companies have been setting up fake data centers in neutral countries, outfitting them with Nvidia servers loaded with chips, then dismantling the servers and sending the chips off to China. Nvidia said Wednesday that its unaware of any such activity. Friction between Zuckerbergs new superintelligence and other parts of Meta?: report After the disappointing performance of Metas latest Llama models, CEO Mark Zuckerberg hatched a plan to put his AI lab in the running to build artificial superintelligence. He badly wants Meta to compete for that holy grail against the likes of OpenAI, Anthropic, xAI, and Google DeepMind. So, he paid $14.3 billion to buy Scale AI with the idea of having that companys young CEO Alexandr Wang lead a new superintelligence research group at Meta. Over the summer, Wang and Zuckerberg went on a poaching spree to hire top AI research talent away from those companies, offering salaries in the hundreds of millions of dollars. They were successful: The new group has about 100 researchers. But all is not well, the New York Times reports. Wang has clashed with some of Zuckerbergs top lieutenantsChris Cox, who manages the companys social network products, and Andrew Bosworth, who runs Metas mixed reality (metaverse) businesson how Wangs groups research should be applied. From the report: In one case, Mr. Cox and Mr. Bosworth wanted Mr. Wangs team to concentrate on using Instagram and Facebook data to help train Metas new foundational A.I. model known as a frontier model to improve the companys social media feeds and advertising business, they said. But Mr. Wang, who is developing the model, pushed back. He argued that the goal should be to catch up to rival A.I. models from OpenAI and Google before focusing on products, the people said. In other words, Cox and Bosworth are more interested in using Wangs AI models as a means to an end (a business end): to pump up social engagement and better target ads at users. But Wang may see the superintelligence group as something more like a pure research group that sets its own research agenda. Wang, Cox, and Bosworth may simply be the latest actors in a much older tension between pure research and applied AI. Its unclear if Mr. Wang, Mr. Cox and Mr. Bosworth have resolved their debate, the Times reports. After all the money he spent to chase superintelligence, Zuckerberg is likely to side with Wang and insulate the group from short-term demands of product managers. Why Musk and Bezos are putting data centers in space Why are Elon Musk and Jeff Bezos working on missions to launch AI data centers into space? It sounds exotic. But it makes sense. Tech companies and their partners are spending trillions to build new terrestrial data centers to produce enough computing power for AI. In some areas, electricity costs have increased after the local energy provider built new grid infrastructure to accommodate new data centers. Data centers need a lot of electricity to power the AI chips inside them, and a lot of electricity and water to keep the chips cool. Its very cold in space, so the cooling problem goes away. An orbiting data center could use solar panels to collect the energy needed to run the servers (the sun is 30% more intense in space). Troubles associated ith terrestrial data centersland-use permitting, local zoning, water rights, etc.dont apply in space. The Wall Street Journal reports that Bezoss Blue Origin has had a team working on orbital AI data centers for more than a year. Musks SpaceX has plans to mod one of its Starlink satellites to host AI servers. Google and Planet Labs have plans to launch two test satellites into orbit loaded with Google AI chips (called Tensor Processing Units). Other, smaller companies, such as Starcloud and Axiom AI, have sprung up to focus all their efforts on orbiting data centers. Those involved acknowledge that while the floating data centers are technically feasible, lots of work remains to bring the costs down to a point where theyre competitive with earth-based data centers. More AI coverage from Fast Company: OpenAI appoints Slack CEO Denise Dresser as first Chief Revenue Officer Nvidias Washington charm offensive has paid off big Google faces a new antitrust probe in Europe over content it uses for AI Trump allows Nvidia to sell H200 AI chips to China Want exclusive reporting and trend analysis on technology, business innovation, future of work, and design? Sign up for Fast Company Premium.
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