Do Kwon Urges US Court to Limit Prison Sentence to Five Years Over Terra Collapse

Quick Breakdown 

• Do Kwon seeks a maximum of five years in a U.S prison, arguing he has already served a lengthy and harsh detention time.
• He faces a separate prosecution in South Korea, where authorities want up to 40 years.
• Sam Bankman-Fried is appealing his 25-year sentence, saying his original trial was unfair.

 

Terraform Labs co-founder Do Kwon is asking a US federal judge to impose no more than a five-year prison sentence for his role in the 2022 collapse of the Terra ecosystem, a crash that wiped roughly $40 billion from cryptocurrency markets and triggered investigations across multiple countries.

Defence says a longer sentence is “excessive”

According to a Wednesday filing cited by Bloomberg, Kwon argued that anything beyond five years would be disproportionate given the punishment he has already endured.

🇺🇸 NEW: Terraform Labs co-founder Do Kwon says his sentence in the $40B TerraUSD fraud case should be capped at 5 years.

The court decision will be hugely important for market sentiment — especially for LUNA, UST victims, and overall crypto regulation momentum. #Crypto #DoKwon … pic.twitter.com/FN88OOkm65

— SinghEconomics (@SinghEconomics) November 27, 2025

Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to defraud after being extradited from Montenegro. His legal team told the court he had spent nearly three years in detention, “with more than half of that time under harsh and inhumane conditions” in Montenegro. They added that he has already suffered severe financial and personal consequences since Terra’s implosion.

Under his plea deal, US prosecutors agreed not to pursue more than 12 years. However, Kwon’s legal team insisted that a sentence of more than five years would exceed what is needed for justice. He also agreed to forfeit more than $19 million and several properties as part of the agreement.

South Korea preparing separate prosecution

Kwon’s legal challenges aren’t ending in the US. South Korean prosecutors are pushing a separate case tied to the Terra fallout and are reportedly seeking up to 40 years in prison.

He is set to be sentenced on December 11 by US District Judge Paul Engelmayer in Manhattan, with prosecutors expected to file their own recommendation soon.

Kwon had been off the radar for months after the Terra collapse until Montenegrin authorities arrested him for using falsified travel documents. He served four months in prison there before the US and South Korea contested over his extradition, a process that became tangled in Montenegro’s court system.

SBF heads back to court in appeal

Kwon isn’t the only industry figure facing heavy legal scrutiny. Former FTX CEO Sam Bankman-Fried, who received a 25-year sentence earlier this year, is now appealing his conviction.

 

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