Terraform Labs co-founder Do Kwon asked a US judge to cap his prison time at five years for his role in the collapse of the Terra ecosystem, which erased about $40 billion from crypto markets in 2022.
In a court filing on Wednesday, Kwon argued that a longer term would be excessive given the punishment he has already served and the penalties he has agreed to accept, according to Bloomberg.
Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to defraud after being extradited from Montenegro, where he had been detained. His lawyers said he had spent almost three years behind bars, “with more than half that time in brutal conditions in Montenegro,” and that he had already paid a heavy personal and financial price.
Under the plea agreement, US prosecutors agreed not to seek a sentence longer than 12 years. However, the defense called anything beyond five years “far greater than necessary” to achieve justice. Kwon also agreed to forfeit more than $19 million along with several properties as part of the deal.
Kwon to face prison time in South Korea
After the US sentencing, Kwon’s legal troubles will not be over. Prosecutors in South Korea are pursuing a separate case tied to the same events and are seeking up to 40 years in prison.
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Kwon is scheduled to be sentenced by US District Judge Paul Engelmayer in Manhattan on Dec. 11. Prosecutors are expected to submit their own recommendation in the coming days.
After the 2022 Terra crash, Kwon’s whereabouts were largely unknown until Montenegrin authorities arrested him for using falsified travel documents. He served four months in prison there before US and South Korean officials both petitioned Montenegro for extradition, which was complicated by challenges in the country’s lower courts.
Related: Three years after FTX’s collapse, creditors wait as the industry rebuilds trust
SBF appeals conviction
Kwon is not the only crypto-related figure who has not gotten off. In 2024, a federal judge sentenced former FTX CEO Sam Bankman-Fried to 25 years in prison. Earlier this month, the case headed back to court as the former CEO challenged his conviction and sentence in a US appeals court, where his lawyers argued that he was denied a fair trial.
The defense said the jury never heard evidence suggesting FTX remained solvent and claims an early narrative that customer funds were stolen shaped the case before Bankman-Fried could properly defend himself.
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