Terraform Labs co-founder Do Kwon has requested a US judge to limit his prison sentence to five years for his role in the collapse of the Terra ecosystem, which wiped out approximately $40 billion from cryptocurrency markets in 2022. In a court filing, Kwon's legal team argued that a longer term would be excessive, citing the nearly three years he has already spent in detention, including what they described as "brutal conditions" in Montenegro prisons.
Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to defraud after being extradited from Montenegro, where he was arrested for using falsified travel documents. Under the plea agreement, US prosecutors agreed not to seek a sentence longer than 12 years, but Kwon's defense contends that anything beyond five years is "far greater than necessary" for justice. As part of the deal, Kwon has agreed to forfeit over $19 million and several properties.
Sentencing is scheduled for December 11 by US District Judge Paul Engelmayer in Manhattan, with prosecutors expected to submit their recommendation soon. Following the US case, Kwon will face separate legal proceedings in South Korea, where prosecutors are seeking up to 40 years in prison for the same events. The outcome of this case is closely watched as it could set precedents for cryptocurrency regulation and fraud prosecutions globally.
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