Terraform Labs co-founder Do Kwon has formally petitioned a United States court to cap his potential incarceration at five years, while simultaneously confronting legal proceedings in his native South Korea where prosecutors are pursuing a 40-year sentence. The disgraced cryptocurrency executive’s legal team submitted a sentencing memorandum arguing that the proposed U.S. term would constitute appropriate punishment for his role in the Terra-LUNA ecosystem collapse that erased approximately $40 billion from digital asset markets in May 2022.
Kwon’s attorneys emphasized that their client has accepted responsibility for his actions and noted that the recommended sentence aligns with standard guidelines for similar financial offenses in American jurisdictions. The filing comes as South Korean authorities continue their parallel investigation into the Terraform Labs collapse, which triggered widespread contagion throughout the cryptocurrency sector.
The contrasting sentencing positions highlight the divergent approaches to financial crime punishment between the two nations. Legal observers note that Kwon’s legal strategy appears focused on securing the more lenient U.S. disposition before addressing the substantially longer potential sentence in South Korea. The former crypto magnate remains in custody while courts in both countries determine appropriate sanctions for his role in one of digital asset history’s most catastrophic ecosystem failures.
