Prosecutors Seek 12-Year Sentence for Do Kwon in $40B Terra Collapse
U.S. prosecutors are demanding a 12-year prison term for Terraform Labs co-founder Do Kwon, citing his central role in the 2022 collapse of TerraUSD and Luna that erased $40 billion in market value. Kwon’s legal team counters with a plea for five years, setting up a sentencing clash ahead of his December 2025 court date.
The disgraced crypto founder pleaded guilty to fraud charges including commodities manipulation and wire fraud. Prosecutors argue the severity of the scheme—which triggered a sector-wide contagion—warrants maximum penalties under his plea deal. Judge Paul Engelmayer will weigh the arguments in Manhattan federal court.
This case remains a watershed moment for crypto accountability. The Terra ecosystem’s implosion exposed critical vulnerabilities in algorithmic stablecoins, prompting global regulatory scrutiny that persists today.
