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: 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 it would seek only up to 12 years as part of a deal made 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 the cryptocurrency founder should receive the maximum sentence outlined in that deal. In a legal motion filed last Thursday, Department of Justice attorneys argued that Kwon needs a tough 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. A judge later sentenced him 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 twenties and then attributed his blatant criminal conduct, in part, to his 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, quickly lost all their value, wiping out over $40 billion in market value and triggering a cascading crisis in the crypto market. The resulting “contagion” affected FTX and several other notable companies.

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

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

The Department of Justice 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 his clients’ crypto and manipulating his company’s token price.

“While Mashinsky was not detained pending trial and contested central aspects of his conduct, he also did not obtain a fake 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 of traveling with forged passports months after warrants were issued for his arrest 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.