Filing claims Kwon caused greater financial damage than multiple high-profile crypto executives combined
Federal prosecutors in the United States have formally requested a 12-year prison sentence for Terraform Labs co-founder Do Kwon, arguing that his actions led to unprecedented losses across global crypto markets. The recommendation comes ahead of Kwon’s sentencing hearing, where he faces penalties tied to wire fraud and conspiracy charges.
In a recent filing submitted to the U.S. District Court for the Southern District of New York, prosecutors urged the court to impose a lengthy custodial sentence and finalize the forfeiture of Kwon’s alleged criminal proceeds. The document emphasized that the financial damage linked to the collapse of Terraform exceeded losses associated with Sam Bankman-Fried, Alex Mashinsky, and Karl Sebastian Greenwood combined. Prosecutors argued that the Terraform crash sparked a wave of failures that contributed to the broader “Crypto Winter.”
Kwon pleaded guilty earlier this year to two counts of wire fraud and conspiracy to defraud. He was indicted in 2023 on a range of charges, including securities fraud, market manipulation, and money laundering, following the dramatic collapse of the Terra ecosystem in 2022. After months in hiding, he was detained in Montenegro on unrelated charges before being extradited to the United States.
His legal team has urged the court to limit any sentence to no more than five years, stressing that Kwon is likely to face up to 40 years in prison in South Korea, where prosecutors have also filed charges. Attorneys underscored that he may be transferred directly from U.S. custody to immigration detention before being returned to Seoul to await trial.
The sentencing judge retains full discretion and could impose a lighter sentence or decades in prison. The case comes as other industry figures face severe penalties: Bankman-Fried is serving a 25-year term, Mashinsky received 12 years, and Greenwood was sentenced to 20 years for his role in OneCoin.
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This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.