Do Kwon Faces 12-Year Sentence Over $40B TerraUSD Collapse

US prosecutors seek a 12-year prison term for Do Kwon over the TerraUSD collapse, citing massive fraud and $40 billion in losses. Kwon's defense requests five years. Sentencing is set for December 11.

U.S. federal prosecutors are seeking a 12-year prison sentence for Do Kwon, founder of Terraform Labs, following his guilty plea to conspiracy and wire fraud charges related to the collapse of TerraUSD and Luna tokens. The prosecutors argue that Kwon's actions constituted a massive fraud, resulting in over $40 billion in losses and triggering a cascade of crises across the cryptocurrency market, including the so-called "Crypto Winter." Kwon's defense team has requested a five-year sentence, citing time already served and potential prosecution in South Korea. As part of a plea agreement, Kwon agreed to forfeit more than $19 million and several properties. Prosecutors highlighted that the scale of losses from the Terraform collapse surpassed those of other high-profile crypto failures and that Kwon misled investors about the stability and risks of his projects. The sentencing is scheduled for December 11 in Manhattan federal court, where Judge Paul Engelmayer will determine the final outcome.