Do Kwon says five years in prison enough for Terra crypto fraud

[NEW YORK] Terraform Labs co-founder Do Kwon says he should get no more than five years in prison in the US for his role in a fraud tied to the US$40 billion collapse of the TerraUSD stablecoin in 2022.

Kwon pleaded guilty in August to conspiracy and wire fraud and averted a trial after he was extradited to the US from Montenegro, where he had been arrested and convicted of using a phony passport while a fugitive from charges in his native South Korea.

In their sentencing recommendation filed late on Wednesday (Nov 26), Kwon’s lawyers said that while prosecutors agreed in his plea deal not to seek more than 12 years in prison, that is “far greater than necessary” to achieve justice.

The defence lawyers said Kwon already has spent almost three years locked up, “with more than half that time in brutal conditions in Montenegro,” and has suffered substantially for his crimes. He also agreed to forfeit more than US$19 million and some properties as part of the plea deal.

The lawyers noted that Kwon still faces trial in South Korea for the same conduct and that prosecutors there are seeking a prison term of 40 years.

Kwon’s sentencing by US district judge Paul Engelmayer in Manhattan is set for Dec 11. The government is expected to file its sentencing recommendation soon. BLOOMBERG