U.S. prosecutors seek a 12-year prison sentence for Terra co‑founder Do Kwon, positioning the request against the 25‑year term given to Sam Bankman‑Fried and the scale of investor losses from the Terra collapse. The filing underscores a dispute over punishment severity, with Kwon’s defence pursuing a five‑year term while prosecutors frame the case as one of the largest recent crypto frauds. The sentencing timeline remains fluid following a postponement, keeping the final term unresolved.
Federal authorities argue the Terra ecosystem’s collapse caused approximately $40 billion in investor losses and cite the 25‑year sentence for the former FTX CEO as a benchmark to justify a substantial custodial term for Kwon. In their view, the Bankman‑Fried ruling signals that courts will impose lengthy sentences in high‑impact digital‑asset frauds, with the 12‑year request intended as both punitive and deterrent.
The department’s filing also reflects a prior prosecutorial decision: in August, prosecutors signalled they would not seek a term above 12 years, effectively setting a negotiated ceiling despite statutory maximums. The theoretical maximum penalties across the counts Kwon faces could reach far higher—up to 25 years on certain conspiracy and wire‑fraud counts and substantially more when aggregated across all charges—but the 12‑year cap indicates a strategic limit to what will be pursued at sentencing.
Defence position, procedural status and context of Terra
Kwon’s legal team proposes a five‑year sentence, citing prior detention and other mitigating circumstances as grounds for leniency. The original sentencing date, anticipated for 11 de dic. de 2025, has been postponed, leaving the final term unresolved. Kwon was extradited to the United States after being detained abroad and subsequently prosecuted on fraud charges tied to the Terra‑Luna collapse.
Describing the Justice Department as a remnant “Trump DOJ” is chronologically and operationally misleading; the department operates with prosecutorial independence and current actions reflect the office’s posture after the 2021 change in administrations. The reliance on high‑profile precedents such as the Bankman‑Fried sentence signals a broader prosecutorial intent to demonstrate accountability in the digital‑asset sector.
The dispute over a 12‑year term for Do Kwon crystallises tensions over how to scale punishment to the financial magnitude of crypto collapses and how prosecutors balance maximum statutory exposure with pragmatic case‑management goals. Sentencing remains pending following the postponement originally set for 11 de dic. de 2025; the outcome will help set a benchmark for future large‑scale crypto fraud prosecutions.
