U.S. Prosecutors Seek 12-Year Sentence for Terraform Founder Do Kwon in Crypto Fraud
The U.S. Department of Justice (DOJ) is pushing for the toughest possible sentence—12 years in prison—for Terra founder Do Kwon, who pleaded guilty earlier this year. This is the maximum sentence allowed under his plea agreement from August.
Why the DOJ Wants the Maximum Sentence
Even though Kwon could technically face up to 25 years under federal law, prosecutors had agreed to cap their request at 12 years in exchange for his guilty plea. Kwon admitted to conspiracy to defraud and wire fraud.
But now, the DOJ says that giving him anything less than 12 years would be unfair—especially when compared to other major crypto fraud cases.
The biggest comparison?
Sam Bankman-Fried, the FTX founder, who received 25 years for multiple fraud and conspiracy charges.
Prosecutors wrote that both men committed “fraud of staggering proportions” at a young age. So they argue that a significantly lighter sentence for Kwon simply wouldn’t make sense.
How Terra’s Collapse Triggered a Global Meltdown
Do Kwon, now 34, became one of the most controversial figures in crypto when the collapse of his two tokens—UST and LUNA—in 2022 wiped out over $40 billion in investor value.
This disaster didn’t just wipe out fortunes—it triggered a domino effect across the crypto market, contributing to the downfall of other firms, including FTX.
Why Prosecutors Say Kwon’s Case Is Even Bigger
Kwon’s lawyers asked the court for a much lighter, five-year sentence. They even cited the 12-year sentence of Celsius founder Alex Mashinsky as a comparison.
But prosecutors pushed back hard.
They pointed out that Mashinsky didn’t flee the country or use a fake passport—both things Kwon was accused of doing. And while Mashinsky was responsible for about $5 billion in losses, Kwon’s impact was far greater, with $40 billion lost globally.
Kwon’s Arrest and Extradition
After months on the run, Kwon was arrested in Montenegro in 2023 for traveling with fake documents.
Both the U.S. and South Korea sought his extradition, leading to a long legal fight.
Eventually, he was sent to New York earlier this year.
What Happens Next
Do Kwon will be sentenced on December 11 in Manhattan by U.S. District Judge Paul Engelmayer.
All eyes in the crypto world are now on that date.
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