Catenaa, Tuesday, December 09, 2025-Federal prosecutors are requesting a 12-year prison term for Terraform Labs co-founder Do Kwon for orchestrating the 2022 TerraUSD collapse that wiped out $40 billion in cryptocurrency value.
The filing ahead of Kwon’s December 11 sentencing cites his fraudulent statements and concealment of market risks, which contributed to broader crypto market turmoil, including the FTX implosion.
Kwon, 34, pleaded guilty in August to conspiracy and wire fraud under an agreement capping recommendations at 12 years.
His defense seeks a five-year term, citing nearly three years of detention in Montenegro and forfeiture of $19 million and multiple properties.
US authorities have indicated he could serve part of his sentence in South Korea if eligible under international transfer programs.
Prosecutors emphasized the systemic damage caused by Kwon’s actions, highlighting false assurances regarding TerraUSD’s peg restoration and secret interventions by Jump Trading in 2021 that masked vulnerabilities before the collapse.
Despite the massive investor losses, restitution claims were not pursued due to complexities in calculating global individual losses.
The case contrasts with other high-profile crypto frauds. Sam Bankman-Fried received a 25-year sentence plus $11 billion in restitution for the FTX collapse, while Kwon’s guilty plea reduces his exposure despite Terra’s larger losses.
Legal experts anticipate that Judge Paul Engelmayer may impose a sentence in the 15–20-year range, reflecting the severity and market impact of the fraud.
Kwon was arrested in Montenegro in March 2023 under a false passport, triggering a prolonged extradition dispute before his transfer to the US
The sentencing hearing will test how cooperation through guilty pleas influences punishment relative to full trial convictions in major crypto fraud cases.
