Terraform Labs Founder Faces Dual Legal Battles After Terra Collapse
Terraform Labs co-founder Do Kwon is urging a US court to keep his prison sentence to no more than five years, marking a new chapter in the fallout from the 2022 Terra ecosystem crash. The collapse erased roughly $40 billion from global crypto markets and triggered one of the largest regulatory responses in the industry’s history. Kwon argues that a longer sentence would be excessive given the years he has already spent in detention.
A Push for a Reduced Sentence
In a recent court filing, Kwon’s legal team emphasized that he has already endured nearly three years behind bars, including what they described as “brutal conditions” during his time in Montenegro. The defense noted that the plea agreement capped prosecutorial recommendations at 12 years, but insisted that anything above five years would be disproportionate.
Legal analysts say Kwon is attempting to position himself as cooperative in hopes of mitigating the consequences.
As part of the plea deal, Kwon agreed to surrender more than $19 million and multiple properties — a move that observers say signals a strategy to demonstrate accountability. “Financial forfeiture is a key indicator of willingness to accept responsibility,” .
South Korea Prepares Its Own Case
Even if Kwon secures a lighter sentence in the US, his legal troubles are far from over. South Korean prosecutors are pursuing charges that could lead to up to 40 years in prison, reflecting the scale of losses experienced by domestic investors. Regulators in Seoul are expected to move quickly once the US sentencing is finalized.
The Kwon case echoes other high-profile crypto prosecutions, signaling a stricter global stance on digital-asset misconduct. Analysts say these rulings underscore a message to the industry: transparency and compliance are no longer optional.
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