Prosecution's Recommendation
U.S. prosecutors have recommended a 12-year prison sentence for Terraform Labs co-founder Do Kwon. They argue that the financial damage linked to the collapse of the Terra ecosystem exceeds the combined losses seen in the cases of Sam Bankman-Fried, Alex Mashinsky, and Carl Sebastian Greenwood.
This request was submitted to the New York District Court four months after Kwon pleaded guilty to two fraud charges. Prosecutors insist that his actions not only accelerated Terraform’s downfall but also contributed to the broader onset of the “crypto winter.”
They also called for full forfeiture of any income tied to his conduct.
Background and Legal Proceedings
Kwon was indicted in the United States in 2023 on charges that included securities fraud and money laundering. After Terra’s collapse, he went into hiding before being arrested in Montenegro on unrelated offenses and later extradited to the U.S.
Now, the court must determine his final sentence. Judges are not bound by the prosecution’s request, meaning the punishment could be shorter or significantly longer than 12 years.
Defense Arguments for Leniency
Kwon’s legal team is pushing for a sentence of no more than five years. They argue that once his U.S. sentence is served, he will be deported directly to South Korea, where he faces up to 40 years in prison. They emphasize that Kwon will not be eligible for release between the two proceedings.
When determining his punishment, the judge will weigh both sides’ arguments and compare similar cases.
Comparison with Other Crypto Cases
- •Sam Bankman-Fried: Received a 25-year sentence.
- •Alex Mashinsky: Received a 12-year sentence.
- •Carl Sebastian Greenwood: Received a 20-year sentence for his involvement in the OneCoin scheme.
As previously reported, Bankman-Fried has claimed that his own case involved judicial bias and has requested a review.
The final sentencing of Do Kwon is expected to set one of the most significant precedents in crypto-related criminal cases.