US prosecutors push for 12-year prison sentence for Terraform co-founder Do Kwon’s role in $40 billion collapse

U.S. prosecutors have submitted a sentencing recommendation to the U.S. District Judge Paul Engelmayer, arguing that Terraform Labs co-founder Do Kwon should serve 12 years in prison for his role in the $40 billion collapse of the Terra and Luna tokens. Prosecutors cited the sheer scale and impact of Kwon's years-long fraud, which deprived investors of informed decisions and artificially inflated the tokens' value for his enrichment. Kwon's lawyers previously argued for a sentence of up to five years, attributing part of the crash to third-party exploits. Kwon pleaded guilty in August to wire fraud and conspiracy to defraud, stemming from charges related to the collapse of the algorithmic stablecoin Terra USD and its linked token Luna. The government is also seeking that Kwon forfeit over $19 million, but is waiving restitution to expedite payments to victims. Kwon was extradited to the U.S. in December 2024 after being arrested in Montenegro in March 2023. He was previously found liable for civil fraud against investors in a separate SEC case.

(Source：The Block)