Do Kwon, a co-founder of Terraform Labs, requested that a US judge limit his prison term to five years due to his involvement in the Terra ecosystem’s collapse in 2022, which wiped away over $40 billion from cryptocurrency markets.
According to Bloomberg, Kwon said in a court petition on Wednesday that a lengthier sentence would be unreasonable considering the penalty he has already received and the consequences he has consented to.
The history of the case
After being extradited from Montenegro, Kwon entered a guilty plea to two charges of wire fraud and conspiracy to defraud in August. He was imprisoned for over three years, “with more than half that time in brutal conditions in Montenegro,” according to his attorneys, and he had already suffered a high financial and personal cost.
US prosecutors promised not to pursue a sentence of more than 12 years as part of the plea deal. Anything more than five years, according to the defence, is “far greater than necessary” to attain justice. As part of the agreement, Kwon also consented to forfeit multiple properties and over $19 million.
Also Read: Singapore’s High Court Rejects Do Kwon’s Claim Over $28.72M Penthouse Payment
Prison time for Do Kwon
Kwon’s legal issues won’t end with the US punishment. In a different case related to the same incidents, South Korean prosecutors are seeking a maximum sentence of 40 years in jail.
On December 11, US District Judge Paul Engelmayer is set to sentence Kwon in Manhattan. In the upcoming days, prosecutors are expected to present their own proposal.
Kwon’s location was mostly unknown following the 2022 Terra disaster until he was detained by Montenegrin officials for using forged travel credentials. Before US and South Korean officials petitioned Montenegro for extradition, he was imprisoned there for four months. However, the process was hampered by disputes in the country’s lower courts.
Kwon is hardly the only person involved in cryptocurrency who hasn’t moved on. Sam Bankman-Fried, the former CEO of FTX, was given a 25-year jail sentence by a federal judge in 2024.
The former CEO filed a challenge to his conviction and imprisonment in a US appeals court earlier this month, arguing that he was not given a fair trial.
The road ahead
Although prosecutors previously agreed not to seek more than 12 years under the terms of the plea agreement, the government is anticipated to submit its own sentence proposal shortly.
Regardless of any suggestions from the prosecution or requests from the defence, Judge Engelmayer has the last say over the punishment.
Also Read: Terraform Co-Founder Do Kwon May Plead Guilty In U.S. Fraud Case Over $40B TerraUSD Collapse