terra

Do Kwon's lawyers insist that the maximum prison term in the United States for his involvement in the collapse of the Terra ecosystem should be limited to five years. According to their position, this term is 'proportionate' to the consequences of his actions, despite the fact that the collapse of the algorithmic stablecoin TerraUSD in 2022 led to the destruction of about 40 billion dollars in market capitalization. Thus, the defense is effectively asking the court to consider not only the scale of the damage but also the time Kwon has already served in custody.

Do Kwon, co-founder of the collapsed Terraform Labs and one of the most controversial figures in the crypto world, has formally asked a U.S. judge to limit his prison sentence to five years. He argues that such a sentence would be “more than sufficient” for the fraud tied to the implosion of the Terra ecosystem — a collapse that wiped nearly $40 billion from the market in 2022.
The request follows his August guilty plea to conspiracy and wire-fraud charges, allowing him to avoid a full trial after being extradited from Montenegro, where he had been arrested for using falsified travel documents.

Defense Team: Three Years Behind Bars Is Enough — Montenegro Conditions Were Severe
In a filing dated November 26, Kwon’s legal team argues that while U.S. prosecutors agreed not to seek more than 12 years under the plea agreement, even that exceeds what is necessary for justice.
They highlight that:
Kwon has already spent nearly three years in prison,more than half of that time in harsh conditions in Montenegro,and has agreed to forfeit over $19 million as well as additional assets.
The defense also stressed that Kwon is simultaneously facing similar charges in South Korea, where prosecutors are seeking a staggering 40-year sentence, and that this should be taken into account.

Sentencing Scheduled for December 11 — Judge Engelmayer Will Decide
The final sentence is expected on December 11, to be delivered by U.S. District Judge Paul Adam Engelmayer of the Southern District of New York. By then, the U.S. government must submit its own sentencing recommendation — which analysts expect to be significantly stricter than the five years requested by Kwon’s team.
After pleading guilty, Kwon read a prepared statement in which he admitted he “voluntarily worked with others” to deceive Terraform Labs customers.

He added:

“What I did was wrong, and I want to apologize. I accept full responsibility.”

The TerraUSD Collapse Triggered a Market Shockwave
The breakdown of Terraform’s algorithmic stablecoin TerraUSD in spring 2022 remains one of the most destructive events in crypto history. It set off a cascade of liquidations, collapsed the value of LUNA, and helped create the conditions that ultimately contributed to the fall of FTX.
U.S. authorities have described TerraUSD as one of the largest crypto frauds ever uncovered. Because of this, federal prosecutors have previously stated they would seek the maximum possible sentence of 12 years, even within a plea agreement.
Under U.S. sentencing rules, Kwon technically faces:
up to 5 years for conspiracy,up to 20 years for wire fraud.
Nine Charges, a Plea Deal, and the Option to Serve Part of His Sentence in South Korea
Kwon originally faced nine separate charges. The agreement allows him to serve half his sentence in the U.S. and the other half in South Korea — but only if he complies fully with the plea terms and qualifies for prisoner transfer.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) won its civil case against Terraform Labs and Kwon in 2024. After a two-week trial in New York, a jury concluded that both defendants had intentionally misled investors.
Analysts note that this civil verdict is a bad omen for Kwon’s chances of securing a significantly reduced sentence in the criminal case.

#DoKwon , #CryptoRegulation , #CryptoFraud , #CryptoNews , #Terra

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