Do Kwon Seeks Five-Year Sentence in US Terraform Fraud Case

TLDR

• Do Kwon has formally requested a five-year prison sentence from a US judge.
• He pleaded guilty to conspiracy and wire fraud tied to the collapse of the Terra ecosystem.
• Kwon’s legal team argued that five years would be a sufficient punishment under the circumstances.
• He has already served nearly three years, much of it under harsh conditions in Montenegro.
• As part of his plea deal, Kwon agreed to forfeit over 19 million dollars and certain properties.

Do Kwon has asked a US judge to limit his prison term to five years in a high-profile crypto fraud case. He made this request after admitting guilt in a conspiracy and wire fraud case tied to the Terra ecosystem collapse. Kwon’s defense team submitted their sentencing recommendation to the Southern District of New York on Wednesday, November 26.

Defense Pushes for Reduced Sentence

Kwon pleaded guilty in August 2025 after reaching a plea deal with US prosecutors to avoid a scheduled trial. He claimed five years would be “more than sufficient” to serve justice for his role in misleading crypto investors. According to court documents, he agreed to the forfeiture of over $19 million and some properties.

His lawyers said the nearly three years already served, partly in harsh conditions in Montenegro, should be considered. They stressed that Kwon “accepts full responsibility” for defrauding TerraUSD investors and read a statement of apology in court. “What I did was wrong, and I want to apologize for my actions,” Do Kwon stated during his plea hearing.

While the plea deal capped the government’s request at 12 years, Kwon’s attorneys argued that term was excessive. The US code sets a maximum of five years for conspiracy and twenty years for wire fraud, with sentencing up to the judge. The defense reminded the court that Kwon still faces trial in South Korea, where prosecutors want a 40-year term.

Extradition from Montenegro and Legal Process

Authorities arrested Do Kwon in Montenegro for using a fake passport while attempting to flee fraud charges.
A Montenegrin court sentenced him before approving his extradition to the US earlier in 2025.
Since January, he has been held under US custody as part of the extradition agreement.

The US government charged him with nine counts in total, but the plea deal narrowed his liability. Prosecutors implied a 12-year sentence would deter others from engaging in similar crypto-related fraud schemes. Do Kwon is expected to serve part of his US sentence in South Korea, based on a transfer program agreement.

He must follow the rules of the agreement strictly to qualify for prison transfer to South Korea. The US court will allow the transfer only after he completes half of his sentence in American custody. The sentencing hearing is scheduled for December 11 and will be presided over by Judge Paul Adam Engelmayer.

SEC Lawsuit and Civil Verdict

In early 2024, the US SEC sued Do Kwon and Terraform Labs, accusing them of civil fraud in the crypto market. During a two-week trial in New York, a jury ruled that Kwon and the firm misled investors with false information. The jury found that Do Kwon deceived TerraUSD buyers about the coin’s stability and investment guarantees.

Court records showed that Kwon held 92% of Terraform Labs during the time of the alleged misconduct. His plea deal in the criminal case came after this civil judgment concluded against him in federal court. Analysts indicated this outcome may affect his chances in related criminal cases still pending elsewhere.

The TerraUSD collapse caused disruption in crypto markets in spring 2022, affecting other platforms including FTX. Following this, authorities expanded investigations into the broader fallout across the digital asset sector. The US government will submit its final sentencing recommendation ahead of the December 11 court date.

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