Trump DOJ Seeks 12-Year Prison Sentence for Terra Founder Do Kwon, Referring to SBF Case

The U.S. Department of Justice is urging a federal court to impose a 12-year prison term on Do Kwon, the founder of Terra, which represents the maximum punishment agreed upon after his guilty plea earlier this year. While Kwon could have faced up to 25 years, prosecutors had previously committed to seeking no more than 12 years as part of a plea arrangement designed to avoid a jury trial, in which Kwon admitted to conspiracy to defraud and wire fraud.

Federal prosecutors are now pushing for the full 12-year sentence allowed under that agreement. In a filing submitted Thursday evening, the DOJ argued that a strong sentence is necessary to prevent unwarranted sentencing disparities with similar cases, particularly pointing to FTX founder Sam Bankman-Fried.

Bankman-Fried was convicted in a 2023 jury trial on seven counts of fraud and conspiracy linked to the collapse of his $32 billion crypto exchange and was later sentenced to 25 years in prison. Prosecutors highlighted the parallels, noting that both Kwon and Bankman-Fried committed large-scale frauds in their twenties and had cited youth and inexperience in their defense.

Kwon, a 34-year-old South Korean national, played a central role in the 2022 crypto market collapse when his two cryptocurrencies, UST and LUNA, became worthless, wiping out over $40 billion in investor value and triggering a chain reaction that affected other major firms, including FTX.

In their filing, prosecutors criticized Kwons legal team for omitting Bankman-Frieds sentence in their request for a five-year term. Bankman-Fried exercised his right to a trial, but that hardly justifies a 20-year difference between his sentence and the one Kwon requests, the DOJ stated.

The DOJ also challenged comparisons to Celsius founder Alex Mashinsky, who received a 12-year sentence in 2025 for misusing customer funds and manipulating token prices. Mashinsky did not attempt to flee or use fake documents, and the financial impact of his crimes was far smaller$5 billion versus $40 billion in losses, prosecutors noted.

Kwon was arrested in Montenegro in 2023 for traveling with forged passports after international warrants were issued for his capture. Following lengthy jurisdictional disputes, he was extradited to New York earlier this year. His sentencing is scheduled for December 11 before U.S. District Judge Paul Engelmayer in Manhattan.

Author: Harper Simmons