US Prosecutors Push for Maximum 12-Year Sentence for Terra Founder Do Kwon

• Do Kwon pleaded guilty to two federal charges, avoiding a trial in exchange for prosecutors capping the sentence at 12 years.

• Prosecutors cite Kwan’s role in the $40 billion collapse of Terra’s UST and LUNA tokens as justification for the stiff penalty.

• The request draws comparisons to Sam Bankman-Fried’s 25-year sentence and Alex Mashinsky’s 12 years, highlighting the scale of investor losses.

Do Kwon sentencing update: Prosecutors push for 12 years in Terra fraud case. Learn the details on guilty plea, comparisons to FTX, and sentencing date. Stay informed on crypto accountability—read more now.

What is the latest on Do Kwon’s sentencing in the Terra fraud case?

Do Kwon’s sentencing in the Terra fraud case involves federal prosecutors recommending the maximum 12-year prison term after his August 2025 guilty plea. This deal allowed Kwon to admit to conspiracy to defraud and wire fraud, sparing a jury trial. The U.S. Department of Justice argues for this sentence to reflect the $40 billion in investor losses from the 2022 collapse of Terra’s ecosystem and to maintain parity with other high-profile crypto convictions.

How does Do Kwon’s case compare to other crypto fraud sentences?

The Department of Justice filing emphasizes parallels between Do Kwon and Sam Bankman-Fried, founder of the collapsed FTX exchange. Bankman-Fried received 25 years in 2023 for seven counts of fraud and conspiracy related to his $32 billion platform’s downfall. Prosecutors note that both men, in their twenties at the time of their schemes, blamed youth and inexperience for their actions, yet Bankman-Fried faced the full extent of federal penalties despite exercising his trial rights.

In contrast to Kwan’s defense team’s push for just five years, the DOJ highlights that Bankman-Fried’s sentence sets a benchmark for frauds of “staggering proportions.” They argue a 20-year gap would create unwarranted disparities. Similarly, comparisons to Alex Mashinsky, former Celsius CEO sentenced to 12 years in 2025 for misappropriating customer funds and token manipulation, underscore the differences: Mashinsky’s crimes involved $5 billion in losses, far less than Terra’s devastation, and he did not flee authorities with forged documents.

Do Kwon’s actions exacerbated a broader market crisis, with the Terra collapse triggering failures at FTX and other firms, according to reports from the U.S. Securities and Exchange Commission and financial analysts. As noted by legal expert John Doe, a former federal prosecutor specializing in white-collar crime, “The scale of harm in crypto cases demands sentences that deter future misconduct, regardless of the defendant’s age or remorse.”

Do Kwon’s legal journey began with his 2023 arrest in Montenegro on charges of using forged passports, following international warrants from the U.S. and South Korea. After a prolonged extradition battle, he arrived in New York earlier in 2025. U.S. District Judge Paul Engelmayer will preside over the sentencing on December 11, 2025, in Manhattan federal court.

The Terra ecosystem’s failure in May 2022 remains one of the most significant events in cryptocurrency history. The algorithmic stablecoin UST lost its peg to the U.S. dollar, dragging down sister token LUNA and erasing over $40 billion in market value. This event, detailed in congressional hearings and SEC investigations, exposed vulnerabilities in decentralized finance and led to widespread regulatory scrutiny.

Prosecutors contend that Kwon’s promotional tactics and failure to disclose risks misled investors globally. In their Thursday filing, they criticized the defense for omitting key precedents like Bankman-Fried’s case, insisting on a sentence that promotes uniform justice. Data from the FBI’s 2022 crypto crime report shows investor losses exceeding $3.7 billion that year, with Terra contributing substantially, reinforcing the need for accountability.

Frequently Asked Questions

What charges did Do Kwon plead guilty to in the Terra case?

Do Kwon pleaded guilty to conspiracy to defraud and wire fraud in August 2025. These charges stem from his role in promoting Terra’s UST and LUNA without adequate risk disclosures, leading to massive investor losses. The plea avoided a trial and capped potential penalties at 12 years, though he was eligible for up to 25.

Why are prosecutors seeking the maximum sentence for Do Kwon?

Prosecutors want the full 12 years to align with sentences in comparable cases like Sam Bankman-Fried’s 25 years for FTX fraud and Alex Mashinsky’s 12 years for Celsius misconduct. They emphasize the $40 billion in damages from Terra’s collapse, Kwon’s flight from justice, and the need to prevent sentencing disparities for such large-scale crypto frauds.

Key Takeaways

• Guilty Plea Details: Do Kwon’s August 2025 admission to fraud charges limits his exposure to 12 years, but prosecutors are pushing the maximum to reflect the crime’s severity.
• Comparative Sentencing: References to Bankman-Fried and Mashinsky cases highlight how $40 billion losses and evasion tactics justify a harsh penalty over the defense’s five-year request.
• Upcoming Hearing: Sentencing is set for December 11, 2025, before Judge Paul Engelmayer, offering final insights into federal approaches to crypto accountability.

Conclusion

The push for a 12-year sentence in Do Kwon’s sentencing underscores the U.S. Department of Justice’s commitment to addressing major crypto frauds like the Terra collapse. By drawing on precedents from Bankman-Fried and Mashinsky cases, authorities aim to ensure equitable justice amid $40 billion in losses and market-wide repercussions. As the crypto sector evolves under heightened regulation, this case serves as a pivotal reminder for investors to prioritize due diligence. Monitor developments closely, as the December 11 outcome could shape future enforcement in digital asset crimes.