Do Kwon, co-founder of Terraform Labs, is requesting a U.S. judge to limit his prison sentence to 5 years for his role in the collapse of the Terra ecosystem, which wiped out approximately $40 billion from the cryptocurrency market in 2022.
According to Bloomberg, in court documents filed on Wednesday, Kwon argued that given the punishment he has already served and the penalties he has agreed to, a longer sentence would be excessive.
Kwon pleaded guilty in August to two counts of telecommunications fraud and conspiracy to commit fraud after being extradited from Montenegro, where he had been detained. His lawyers stated that he has spent nearly three years in prison, "more than half of which was under harsh conditions in Montenegro," and that he has paid a heavy personal and financial price.
Under the plea agreement, U.S. prosecutors agreed not to seek a sentence longer than 12 years. However, the defense argues that any sentence exceeding 5 years would be "far beyond what is necessary to achieve justice." As part of the agreement, Kwon also agreed to forfeit over $19 million and several properties.
After sentencing in the U.S., Kwon's legal troubles will not end. South Korean prosecutors are pursuing another case related to the same incident, seeking up to 40 years in prison.
Kwon is scheduled to be sentenced by U.S. District Judge Paul Engelmayer in Manhattan on December 11. Prosecutors are expected to submit their recommendations in the coming days.
After the Terra collapse in 2022, Kwon's whereabouts were largely unknown until he was arrested by Montenegrin authorities for using forged travel documents. He served 4 months there, after which both U.S. and South Korean officials requested his extradition, a process complicated by challenges in the country's lower courts.
Kwon is not the only cryptocurrency figure facing legal issues. In 2024, a federal judge sentenced former FTX CEO Sam Bankman-Fried to 25 years in prison. Earlier this month, the case returned to court as the former CEO challenged his conviction and sentence in a U.S. appeals court, with his lawyers arguing that he was denied the right to a fair trial.
The defense stated that the jury never heard evidence indicating that FTX was still solvent and claimed that early narratives about customer funds being stolen shaped the case before Bankman-Fried could adequately defend himself.
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Original: “Do Kwon says 5 years in U.S. prison is enough, but faces 40 years in South Korea”
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