Do Kwon Asks Judge To Cap Sentence At 5 Years For Role In $40B Terra Ecosystem Collapse
Terraform Labs co-founder Do Kwon has asked a US judge to limit his prison sentence to five years or less following his guilty plea in a fraud case tied to the $40 billion collapse of the Terra ecosystem.
In a recent 23-page letter filed in the US District Court of the Southern District of New York, Kwon’s lawyers argued that a prison term of up to five years would be sufficient given that he has already served time and has accepted penalties.
“Do has already suffered enormously from his conduct,” the letter said. “Regardless of the sentence … more lies ahead.”
Kwon is scheduled to be sentenced by US District Judge Paul Engelmayer in Manhattan on Dec. 11. Prosecutors are also expected to submit recommendations in the next few days.
US Prosecutors Agreed Not To Seek A Sentence Of Longer Than 12 Years
The letter from Kwon’s legal team comes after the Terraform Labs co-founder pleaded guilty to two counts related to fraud charges stemming from the May 2022 collapse of Terra ecosystem currencies, including the algorithmic stablecoin TerraUSD and its sister crypto Luna.
Terra Classic price chart (Source: CoinMarketCap)
As part of the plea deal, US prosecutors had agreed to not seek a sentence longer than 12 years. However, Kwon’s lawyers argued that a sentence longer than five years would be “far greater than necessary.”
That’s mainly because Kwon had been detained in Montenegro for nearly three years, where his attorneys say that “more than half of that time” was “in brutal conditions in Montenegro.” They also said that he had already paid a heavy personal and financial price.
“While the government’s offer to seek no more than a 12-year sentence accounts for these factors, it does not consider the totality of circumstances that support a sentence not greater than five years’ incarceration,” the attorneys said in their letter.
Terra Ecosystem Collapse Was Partly Attributed To Trades By Third Parties
Kwon and his legal team attributed the Terra ecosystem crash partly to coordinated trades by third-party firms that had allegedly exploited vulnerabilities. They cited academic papers and reports from on-chain analytics firm Chainalysis to support their case.
Additionally, the document noted Kwon’s failures to disclose a secret agreement with Jump Trading to support UST’s peg in May 2021.
“Do’s criminal conduct was not motivated by personal greed or enrichment, but rather flowed initially from his ‘hubris’ and later from the desperation of a young founder who made serious mistakes while facing pressures he was ill-equipped to handle,” the legal team said.
Kwon Faces Prison Time In South Korea
Kwon’s legal troubles will continue even after the Dec. 11 US sentence, as he also faces prison time in South Korea.
Prosecutors there seek up to 40 years in prison for him in a case tied to the same events.
Related Articles:
About Author
About Author
