Do Kwon Requests 5-Year Sentence Maximum in $40 Billion Terra Collapse Case

Source: CryptoNewsNet Original Title: Terraform Labs Founder Do Kwon Files New Request in Terra-Luna Case! Details Here Original Link: https://cryptonews.net/news/legal/32059247/

Background

Terraform Labs founder Do Kwon has asked a US court to limit his prison sentence to a maximum of five years after pleading guilty to fraud in connection with the $40 billion collapse of the Terra-Luna ecosystem.

Court Filing Details

In a 23-page petition filed in the Federal Court for the Southern District of New York on November 26, Kwon’s lawyers argued that a sentence of up to five years would be “sufficient and appropriate.”

The prosecution had previously proposed seeking a prison sentence of up to 12 years for Kwon. However, his defense team argued that this request failed to consider all the circumstances, and that Kwon’s actions were not motivated by personal gain or enrichment, but rather by “overconfidence and the mistakes of a young founder made under pressure.”

The Charges and Collapse

Kwon pleaded guilty in August to two charges of fraud related to the TerraUSD (UST) algorithmic stablecoin and the Luna token, which crashed in May 2022. The petition attributed the crash in part to third-party companies exploiting vulnerabilities in the system through coordinated transactions.

It was also emphasized that Kwon’s failure to disclose to investors a secret agreement with Jump Trading in 2021 to maintain the stability of UST seriously overshadowed the risks associated with the project.

Mitigating Factors

The defense noted that Kwon had been detained in Montenegro for nearly two years after being caught with a fake passport in March 2023, even spending time in solitary confinement, and argued that this should factor into the sentence. It was also reported that Kwon will face trial in South Korea on the same charges, with a potential prison sentence of up to 40 years.

Next Steps

Do Kwon’s sentence will be announced on December 11th.