Do Kwon is set to be sentenced this Thursday in New York on charges of fraud related to the collapse of TerraUSD and Luna, a scandal that wiped out nearly $40 billion in 2022. The co-founder of Terraform Labs admitted to providing false information to investors about the reliability of this stablecoin and agreed to a plea deal on charges of conspiracy to commit fraud and online fraud.

Prosecutors have requested a minimum sentence of 12 years, arguing that the collapse increased market tensions and caused significant harm to thousands of users. Do Kwon’s defense team has requested a maximum sentence of 5 years and proposed that he serve part of his sentence in the United States before being transferred back to South Korea to face pending charges.
The case is proceeding alongside a settlement agreement reached with the SEC in 2024, which includes a personal fine of $80 million and a ban on participating in cryptocurrency activities, while Terraform Labs has agreed to pay a fine of $4.55 billion. The verdict will be one of the most significant rulings in determining criminal liability for founders of projects that collapse due to structural faults or misinformation.