Do Kwon Could Face Second Trial in Korea After 15-Year US Sentence
Terraform Labs co-founder Do Kwon faces the opportunity of a further trial and prolonged jail time period in South Korea following his 15-year sentence from a Manhattan federal courtroom for orchestrating the $40 billion TerraUSD collapse.
According to The Korea Times, the 34-year-old Korean nationwide might apply to be transferred to his house nation after serving half his US time period, the place prosecutors are looking for a sentence exceeding 30 years for violations of capital markets legal guidelines.
US District Judge Paul Engelmayer delivered the sentence last week, rejecting each the prosecution’s 12-year recommendation and the defense’s five-year request.
“In the historical past of federal prosecutions, there are few frauds which have induced as a lot hurt as you may have,” Engelmayer instructed Kwon straight.
South Korean prosecutors obtained an arrest warrant for Kwon in September 2022 by way of the Seoul Southern District Prosecutors’ Office joint monetary crimes unit.
A senior prosecutor instructed the native report that prosecuting Kwon domestically would serve native victims most successfully, as roughly 200,000 Korean traders have suffered losses totaling roughly 300 billion received ($204 million).
Ten alleged accomplices have confronted trial in Korea for almost three years whereas authorities awaited Kwon’s potential return.
The separate Korean costs heart on violations of the Capital Markets Act stemming from the identical conduct underlying his US conviction.
However, Korean prosecutors keep they will pursue unbiased punishment whatever the American proceedings.
Kwon initially sought extradition to Korea moderately than to the United States after his March 2023 arrest in Montenegro on costs of possessing solid paperwork.
He spent almost two years detained there earlier than switch to America in December 2024, together with his protection workforce describing the situations as “brutal.”
US prosecutors demand 12-year sentence for Do Kwon after Terra’s $40B collapse that destabilized crypto markets and aided FTX implosion.#FTX #DoKwon #TerraFormhttps://t.co/LfzwEWH4XG
— Cryptonews.com (@cryptonews) December 6, 2025
Terra Collapse Mechanics and Fraudulent Claims
Between 2018 and 2022, Kwon admitted to knowingly collaborating in schemes to defraud Terraform Labs’ crypto purchasers.
The Singapore-based agency issued the TerraUSD stablecoin and its sister token, Luna, claiming that Terra maintained a one-to-one greenback peg by way of its protocol design.
When Terra fell under $1 in May 2021, Kwon publicly said the protocol had restored its worth autonomously.
US prosecutors later found that an funding agency contracted by Terraform Labs had secretly bought Terra to artificially prop up its worth, with Jump Trading’s position intentionally hid from traders.
Both tokens plunged once more in May 2022, wiping out tens of billions in investor worth and triggering cascading failures throughout cryptocurrency markets.
Federal prosecutors particularly cited the collapse’s contribution to Sam Bankman-Fried’s FTX implosion as proof of broader systemic harm past Terra’s fast losses.
Kwon was convicted on 9 counts, together with fraud and cash laundering, and Judge Engelmayer ordered the forfeiture of $19 million in illicit good points.
The preliminary potential sentence beneath US pointers was 130 years, however the August plea agreement capped prosecutorial suggestions at 12 years.
Sentencing Disparities and Transfer Mechanics
Judge Engelmayer called the 12-year suggestion “unreasonable” whereas dismissing the five-year request as “implausible,” finally imposing 15 years as “the least I can impose.”
The protection argued that twin prosecution needs to be factored into sentencing calculations, notably given the overlap in allegations throughout jurisdictions.
The courtroom rejected this reasoning, with Engelmayer stating that one courtroom can not base rulings on hypothesis about one other courtroom’s choices.
US prosecutors indicated they might not oppose a switch request beneath the International Prisoner Transfer Program after Kwon serves half his sentence, leaving the pathway to Korean prosecution open.
US District Judge Paul A. Engelmayer handed down a 15-year jail sentence to Terraform Labs co-founder Do Kwon for Terra’s $40 billion crash.#DoKwon #TerraUSD #CryptoFraudhttps://t.co/7N3WlnQrTB
— Cryptonews.com (@cryptonews) December 12, 2025
The contrasting remedy in comparison with Bankman-Fried’s 25-year sentence has raised questions on consistency, as Kwon’s responsible plea considerably lowered publicity regardless of Terra’s bigger loss.
Legal consultants word that federal pointers for fraud at Terra’s scale usually counsel advisory ranges approaching life imprisonment earlier than statutory caps.
Kwon will obtain credit score for time served in US custody, although questions stay about whether or not his 21-month detention in Montenegro will rely towards his American time period.
The sentencing comes amid escalating crypto-related felony exercise worldwide.
Spanish and Danish authorities just lately arrested nine suspects in a violent kidnapping and murder focusing on a sufferer’s crypto holdings.
Just final month, South Australia Police additionally filed 800 charges against 55 individuals in an enormous crypto-linked crime ring.
The publish Do Kwon Could Face Second Trial in Korea After 15-Year US Sentence appeared first on Cryptonews.
