Do Kwon, the co-founder of Terraform Labs, is asking a US court to limit his prison term to five years for his role in the dramatic collapse of the TerraUSD stablecoin, which wiped out $40 billion in 2022.
Kwon’s request comes ahead of his December sentencing in Manhattan, where a judge will decide the length of his term following his guilty plea to conspiracy and wire fraud, Bloomberg reported.
Defense Argues Time Served and Harsh Conditions
Kwon recently pleaded guilty, avoiding a trial after his extradition from Montenegro, where he had been arrested and convicted for using a fake passport while evading charges in South Korea.
His lawyers argued in court filings that the maximum 12 years agreed in his plea deal is “far greater than necessary” to achieve justice. They emphasized that Kwon has already spent nearly three years in custody, including over half that time in “brutal conditions” in Montenegro.
As part of his plea deal, Kwon agreed to forfeit more than $19 million and several properties. His lawyers highlighted that he still faces potential prosecution in South Korea, where authorities are seeking a 40-year prison term for the same actions.
Sentencing Set for December
US District Judge Paul Engelmayer is scheduled to hand down Kwon’s sentence on December 11. The government is expected to submit its own recommendation before then, which could influence whether Kwon’s requested five-year term is granted.
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In August, Kwon appeared in a Manhattan federal courtroom and pleaded guilty to conspiracy to defraud and wire fraudin connection with the collapse of his TerraUSD and Luna cryptocurrencies.
The failure of these digital assets in 2022 wiped out approximately $40 billion in investor funds during the crypto market downturn. The 33-year-old South Korean entrepreneur admitted to deliberately misleading investors about how TerraUSD maintained its $1 value.
"I made false and misleading statements about why it regained its peg by failing to disclose a trading firm's role in restoring that peg," Kwon told the court. "What I did was wrong."
This article was written by Jared Kirui at www.financemagnates.com.
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