Trump's Department of Justice wants Terra founder Do Kwon to be imprisoned for 12 years

Source: PortaldoBitcoin
Original Title: Trump’s Department of Justice Wants Terra Founder Do Kwon Jailed for 12 Years
Original Link: https://portaldobitcoin.uol.com.br/departamento-de-justica-de-trump-quer-que-o-fundador-da-terra-do-kwon-fique-preso-por-12-anos/

The US Department of Justice is asking a federal judge to sentence Do Kwon to 12 years in prison—the maximum penalty prosecutors reserved the right to seek after the Terra founder pleaded guilty.

Although Kwon is technically eligible to serve 25 years in federal prison, the Department of Justice promised in August that it would seek only up to 12 years as part of a deal intended to encourage Kwon to waive a jury trial and admit to two crimes: conspiracy to commit fraud and wire fraud.

Now, federal prosecutors are arguing that the founder of the cryptocurrency should receive the maximum sentence allowed under that deal. In a legal petition filed last Thursday, DOJ attorneys argued that Kwon needs a harsh sentence to avoid “unwarranted sentencing disparities” with other similar cases—most notably that of FTX founder Sam Bankman-Fried.

In a 2023 jury trial, Bankman-Fried was found guilty of seven counts of fraud and conspiracy for his role in the collapse of his $32 billion cryptocurrency exchange. He was later sentenced by a judge to 25 years in prison.

“Judge Kaplan imposed a 25-year sentence on Bankman-Fried who, like Kwon, perpetrated a fraud of staggering proportions in his early twenties and then, in part, blamed his brazen criminal conduct on youth and inexperience,” prosecutors wrote.

Kwon, a 34-year-old Korean citizen, found himself at the center of a global financial collapse in 2022, when two cryptocurrencies he created, UST and LUNA, rapidly lost all their value, wiping out over $40 billion in market value and triggering a cascading crisis in the crypto market. The ensuing “contagion” affected FTX and several other notable companies.

In the petition filed Thursday, prosecutors noted that Kwon’s attorneys did not mention the Bankman-Fried case in their request for a five-year prison sentence for the entrepreneur.

“It is true that Bankman-Fried exercised his right to a trial,” the DOJ said. “But that hardly justifies a 20-year difference between Bankman-Fried’s sentence and the one requested for Kwon.”

The DOJ also criticized Kwon’s lawyers for arguing that the Terra founder should receive a “much lower sentence” than Celsius founder Alex Mashinsky, who was sentenced to 12 years earlier, in 2025, for misappropriating client cryptocurrencies and manipulating the price of his company’s token.

“While Mashinsky was not detained pending trial and contested central aspects of his conduct, he also did not obtain a false passport or attempt to live as a fugitive in a foreign country,” prosecutors said. “In any case, the magnitude of Mashinsky’s crime pales in comparison to Kwon’s: $5 billion versus $40 billion in losses for investors.”

Kwon was arrested in Montenegro in 2023 and convicted for traveling with falsified passports months after arrest warrants were issued for him in the United States and South Korea.

After an extremely prolonged legal battle, the crypto entrepreneur was extradited to New York earlier this year.

Kwon will be sentenced in Manhattan on December 11 by US District Judge Paul Engelmayer.