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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, <a href="https://www.bloomberg.com/news/articles/2025-11-27/do-kwon-says-five-years-in-prison-enough-for-terra-crypto-fraud" rel="noopener noreferrer nofollow" target="_blank">according</a> to Bloomberg.
<a href="https://cointelegraph.com/news/do-kwon-guilty-fraud-terraform-labs" rel="noopener noreferrer nofollow" target="_self">Kwon pleaded guilty in August</a> to two counts of wire fraud and conspiracy to defraud after <a href="https://cointelegraph.com/news/do-kwon-united-states-custody-extradition-montenegro" rel="noopener noreferrer nofollow">being extradited from Montenegro</a>, 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.
<h2 id="kwon-to-face-prison-time-in-south-korea">Kwon to face prison time in South Korea</h2>
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.
Related: <a href="https://cointelegraph.com/news/from-terrausd-to-yu-why-stablecoins-fail-to-hold-1-and-the-risks-investors-can-t-ignore" rel="noopener noreferrer nofollow" target="https://cointelegraph.com/news/from-terrausd-to-yu-why-stablecoins-fail-to-hold-1-and-the-risks-investors-can-t-ignore">From TerraUSD to YU: Why stablecoins fail to hold $1 and the risks investors can’t ignore</a>
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.<iframe width="100%" height="315" src="https://www.youtube.com/embed/8dzMOuEjFIY?start=" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen loading="lazy" sandbox="allow-scripts allow-same-origin allow-popups allow-forms"></iframe>
After <a href="https://cointelegraph.com/news/why-did-terra-luna-and-ust-crash-find-out-on-the-market-report" rel="noopener noreferrer nofollow">the 2022 Terra crash</a>, Kwon’s whereabouts were largely unknown until Montenegrin authorities <a href="https://cointelegraph.com/news/do-kwon-reportedly-arrested-in-montenegro" rel="noopener noreferrer nofollow">arrested him for using</a> falsified travel documents. He served four months in prison there before US and South Korean officials both petitioned Montenegro for extradition, which <a href="https://cointelegraph.com/news/do-kwon-extradition-montenegro-justice-minister" rel="noopener noreferrer nofollow">was complicated by challenges</a> in the country’s lower courts.
Related: <a href="https://cointelegraph.com/news/three-years-ftx-collapse-crypto-creditors-exchangeearns-back-trust" rel="noopener noreferrer nofollow">Three years after FTX’s collapse, creditors wait as the industry rebuilds trust</a>
<h2 id="sbf-appeals-conviction">SBF appeals conviction</h2>
Kwon is not the only crypto-related figure who has not gotten off. In 2024, a federal judge <a href="https://cointelegraph.com/news/ftx-saga-sam-bankman-fried-25-years-prison-law-decoded" rel="noopener noreferrer nofollow">sentenced former FTX CEO Sam Bankman-Fried</a> to 25 years in prison. Earlier this month, the case <a href="https://cointelegraph.com/news/ftx-sam-bankman-fried-returns-court-appeal?utm_source=rss_feed&amp;utm_medium=feed&amp;utm_campaign=rss_partner_inbound" rel="noopener noreferrer nofollow">headed back to court</a> 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.
Magazine:<a href="https://cointelegraph.com/magazine/2026-pragmatic-privacy-crypto-canton-zcash-ethereum-foundation/" rel="noopener noreferrer nofollow"> 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more</a>

Do Kwon says five-year US sentence is enough as he faces 40 years in South Korea

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