A sentencing suggestion indicated that Do Kwon had cost more money than Sam Bankman-Fried, Alex Mashinsky, and Karl Sebastian Greenwood put together. At his sentencing hearing next week, US attorneys representing the federal government will ask a judge to send Do Kwon, co-founder of Terraform Labs, to prison for 12 years.
The prosecutor requested a court order on Thursday in the United States District Court for the Southern District of New York to sentence Kwon “to twelve years’ imprisonment” and finalise the forfeiture of his criminal proceeds. The complaint happened around four months after the co-founder of Terraform admitted to two counts of wire fraud and conspiracy to defraud.
The Thursday filing noted, ‘In just a few years, Kwon generated losses that were greater than those suffered by Samuel Bankman-Fried, Alexander Mashinsky and Karl Sebastian Greenwood together [emphasis included in filing]. The Terraform market crash set off a chain reaction of problems that spread through cryptocurrency markets and led to what is now known as Crypto Winter.
US authorities charged Kwon in March 2023 with securities fraud, market manipulation, money laundering, and wire fraud, all related to his work at Terraform.
Terraform’s Collapse and Kwon’s Capture
After the fall of Terra in 2022, his whereabouts were unknown at first. However, officials in Montenegro detained him on crimes unrelated to his involvement at the business, and he was later sent back to the US.
In the last 24 hours, the price of Terra’s native token, LUNA, went up by more than 40%, from roughly $0.07 to $0.10 at the time of writing. This was because the sentence recommendation came out. The token did, however, achieve a record high price of almost $19.00 before the ecosystem fell apart in May 2022.
Legal Arguments and Sentence Possibilities
Kwon fears he could still go to jail in South Korea. Lawyers for Kwon asked the court in November to grant him no more than five years in prison. His lawyers made several arguments for a shorter sentence, one of which was that the co-founder may get 40 years in prison in his home country of South Korea, where prosecutors are also working on a case against him.
Kwon’s lawyers said, “He will not be able to walk out of jail in the United States as a free man for any amount of time. He will be taken from whatever facility he serves his sentence directly to an immigration detention centre to await a deportation flight to Seoul, where he will immediately re-enter pretrial detention pending his criminal charges in South Korea.
The judge in charge of the sentencing hearing can still accept Kwon’s and the prosecutors’ recommendations, but he or she can also give the Terraform co-founder a long prison sentence or a much shorter one. Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence after being found guilty of seven felonies. Former Celsius CEO Alex Mashinsky got 12 years in prison, and a judge condemned Karl Sebastian Greenwood to prison for 20 years for his part in the OneCoin scheme.