US Prosecutors Seek 12-Year Sentence for Terraform Founder Do Kwon in Crypto Fraud Case
U.S. prosecutors are seeking a 12-year prison sentence for Do Kwon, founder of Terraform Labs, following his guilty plea for defrauding investors and manipulating cryptocurrency markets. The sentencing is scheduled for December 11 in Manhattan federal court, with prosecutors filing their request in advance of the hearing.
The collapse of the Terra-Luna ecosystem was a major event during the 2022 crypto downturn, often referred to as the crypto winter. At its peak, the Terraform ecosystem had a market value exceeding $50 billion. Prosecutors argue that losses from the Terraform crash surpass the combined losses linked to FTX, Celsius, and OneCoin.
Court filings allege that Terraform employed backdoor agreements, concealed trading activities, and misleading metrics, which contradict claims of decentralization and technical soundness made by the company. Prosecutors also note that Do Kwon fled the fallout, continued to give interviews and tweets while in hiding, and resisted extradition efforts.
The defense has requested a reduced sentence of five years, citing time Kwon has already served while in Montenegro as well as potential prosecution in South Korea.
