Judge Seeks Clarity on Do Kwon's South Korea Charges Ahead of U.S. Sentencing

U.S. District Judge Paul Engelmayer has requested detailed information from prosecutors and defense attorneys regarding the charges and potential sentences Do Kwon, the co-founder of Terraform Labs, could face in South Korea. This inquiry comes just days before Kwon's scheduled sentencing on Thursday, December 12, 2025, in New York, where he previously pleaded guilty to two felony counts of wire fraud and conspiracy to defraud.

The judge's filing specifically asks both legal teams to outline the "maximum and minimum sentences" Kwon could receive if extradited to his home country after serving his U.S. prison term. This indicates the court is considering Kwon's total, multi-jurisdictional legal exposure when determining an appropriate sentence. Kwon's charges stem from the catastrophic 2022 collapse of Terraform Labs, an event that triggered a massive market downturn and widespread losses across the cryptocurrency sector.

Judge Engelmayer also raised a critical question about whether Kwon's four-month detention in Montenegro should be credited toward any U.S. sentence. Kwon was arrested in Montenegro in 2023 for using falsified travel documents and spent over a year fighting extradition requests from both the U.S. and South Korea before being transferred to U.S. custody. The judge's question suggests a desire to avoid "double-counting" custody time across different jurisdictions.

A significant concern highlighted by the judge is the possibility of early release if Kwon is transferred to South Korea to serve part of his sentence. Engelmayer asked both sides to detail South Korea's handling of similar cases, including early release policies and how time served is calculated. Kwon's defense attorneys have stated that even if sentenced to time already served in the U.S., he would immediately face pretrial detention in South Korea upon arrival, where he could potentially face up to 40 years in prison. South Korean authorities issued an arrest warrant for Kwon in 2022 and have consistently stated that his return remains a priority.

The sentencing recommendations are starkly divided. U.S. prosecutors are seeking a prison term of at least 12 years, while Kwon's defense team is pushing for no more than five years. In a notable comparison, prosecutors argued that the losses caused by Kwon "eclipsed those caused" by Sam Bankman-Fried (FTX), Alex Mashinsky (Celsius), and Karl Sebastian Greenwood (OneCoin) combined, framing it as one of the largest fraud cases in crypto history. This comparison could set a precedent for future crypto fraud prosecutions.

Thursday's hearing is unlikely to be the final chapter. Regardless of the U.S. sentence, Kwon faces years of further legal proceedings in South Korea. His case represents a rare, high-stakes example of multi-jurisdictional prosecution in the cryptocurrency world, with its outcome poised to influence how global authorities handle cross-border crypto crimes.