Judge in Do Kwon case demands clarifications before sentencing regarding guarantee of sentence enforcement

Source: PortaldoBitcoin Original Title: Judge in Do Kwon Case Demands Clarifications Before Sentencing on Guarantee of Sentence Compliance Original Link: https://portaldobitcoin.uol.com.br/juiz-do-caso-do-kwon-exige-esclarecimentos-antes-da-sentenca-sobre-garantia-de-cumprimento-de-pena/ The founder of Terraform Labs, Do Kwon, will have his fate decided next Thursday (11), but Judge Paul A. Engelmayer of the Southern District Court of New York has demanded a series of clarifications before issuing the sentence.

According to court documents and specialized reports, the judge presented six formal questions to the parties, seeking to understand essential gaps regarding sentence compliance, possible impacts on victims, and Kwon’s international legal status.

Among the main concerns, Engelmayer highlighted uncertainty about the charges Kwon still faces in South Korea and questioned whether there is any agreement between the defendant and the country’s authorities. The judge requested details on the maximum and minimum penalties in the event of a conviction and whether any eventual sentence could be served concurrently or consecutively with the American sentence.

The judge also requested clarifications about the period Do Kwon spent detained in Montenegro. In the request, the judge asked whether the parties agree that the 17 months and 8 days attributable to extradition should be considered as part of the custody related to the case, and whether the government agreement not to seek more than 12 years in prison presupposes that no days from the Montenegro period would be deducted.

The judge further requested information about the victim compensation process by the Department of Justice, the possible ineligibility of Do Kwon for sentence reduction credits under the First Step Act, and the usefulness of imposing post-release supervision, considering the likelihood of international transfer and possible deportation.

Another sensitive point is the guarantee that, if Kwon is transferred to serve half the sentence abroad, he will not be released before the term determined by US justice. The judge also asked for confirmation on how authorities notified victims and whether any of them wish to be heard during sentencing.

The US prosecution is asking for 12 years in prison; the defense, five. Judge Paul A. Engelmayer expects answers by December 10, the eve of the decisive hearing.

Do Kwon and the Terra (LUNA) collapse

On January 2, Do Kwon pleaded not guilty to US criminal charges over the collapse of the Terra (LUNA) cryptocurrency ecosystem. It was the first hearing in the case after extradition.

Federal authorities accused the 33-year-old tech entrepreneur of nine crimes, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering.

Kwon founded Terraform Labs, the company behind a crypto ecosystem that was once substantial, with applications built around the LUNA token and the algorithmic stablecoin TerraUSD (UST). The project was popular among investors and quickly grew to become the third largest blockchain in the sector, after Ethereum, in early 2022.

Its native cryptocurrency, LUNA, was at its peak as one of the top digital assets by market capitalization. Kwon made a lot of money in a short time.

The end of LUNA

But the Terra Luna ecosystem collapsed in May 2022, taking $40 billion from investors with it. The crash led to a brutal bear market, as many crypto projects exposed to Terra later declared bankruptcy.

The project’s main product, the UST stablecoin, failed to maintain its stable peg to the dollar, which resulted in the collapse of the entire ecosystem and the loss of nearly all its value in a matter of days.

Authorities in the US and South Korea now allege that the entrepreneur was a scammer who deceived investors into buying his cryptocurrency.

“Behind the scenes, Terraform’s main products did not work as Kwon claimed and were manipulated to create the illusion of a functional and decentralized financial system to attract investors,” the prosecution says.

Kwon was arrested in Montenegro for allegedly attempting to travel with a fake passport. His lawyers kept him in the country until December, when he was finally extradited to the United States.