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U.S. Prosecutors Seek 12-Year Prison for Do Kwon Over Terra-Luna Fraud
U.S. federal prosecutors are seeking a 12-year prison sentence for Terraform Labs founder Do Kwon, arguing that his role in the multibillion-dollar Terra–$LUNA crash triggered one of the most damaging events in crypto history and helped set off the prolonged crypto winter. The request was filed Thursday with the U.S. District Court for the Southern District of New York, where the co-founder will be sentenced on December 11.

Source: Wu_Blockchain
In a sentencing submission, prosecutors said Kwon’s “year-long-fraud” which erased more than $40 billion in market value, warrants a lengthy prison term. They argue Do Kwon misled millions of investors about the safety, structure, and stability of Terraform’s algorithmic stablecoin UST and its sister token Luna.
Investors believed TerraUST was stable and decentralized, but the system relied on hidden trading arrangements, deceptive metrics, and undisclosed support mechanism that masked the fragility of the UST-Luna balancing model.
The filing asks for a little over $19 million to be seized. Prosecutors say they won’t seek restitution because it’s too difficult to calculate losses for millions of victims and because many claims overlap with ongoing crypto bankruptcy cases.
Prosecutors Cite Losses Greater Than FTX, Celsius, OneCoin Combined
Prosecutors also highlighted that investor losses from the Terraform collapse exceeded those of FTX, Celsius, and OneCoin combined. 
FTX: Collapsed in Nov 2022 with $8–$10B missing from over 1M users; founder Sam Bankman-Fried convicted of fraud.
Celsius: Bankrupt in July 2022 owing $4.7B; managed $25B at peak; ex-CEO Alex Mashinsky charged with fraud.
OneCoin: Ponzi scheme (2014–2017) stole $4B+ from 3M+ victims; leader Ruja Ignatova still missing.
Sam Bankman-Fried is currently serving 25 years, while Celsius founder Alex Mashinsky received 12 years for fraud, benchmarks prosecutors say support a tough sentence.
They added that the Terra-Luna implosion was a catalyst for the cryptocurrency market, contributing heavily to the 2022 downturn. The Terraform platform, valued over $50B at its peak, triggered a chain reaction that damaged hedge funds, lenders, and retail investors worldwide.
Charges Against Do Kwon: Defense Asks for Five Years
Do Kwon was charged in March 2023 with wire fraud, securities and commodities fraud, conspiracy to commit fraud, market manipulation, and money laundering. He later pleaded guilty to wire fraud and conspiracy to defraud. 
Separately, in April 2024, a jury found the co-founder and Terraform Labs liable for civil fraud in a case brought by the Securities and Exchange Commission (SEC), which argued over misrepresentation of UST’s stability and Terraform’s blockchain products. 
Against these charges, the defense team has requested a sentence of five years, arguing that third-party trading firms exploited UST vulnerabilities and accelerated the collapse. They referenced academic research and Chainalysis data to support their claim. The defence also cited co-founder's time in custody in Montenegro, where he was arrested in 2023 for travelling with forged documents while evading both U.S. and South Korean warrants. 
After months of extradition disputes, Do Kwon was sent to the USA in December 2024.
Jay Clayton Oversees Filing: Eyes Are On December 11
The submission was signed by Jay Clayton, the U.S. Attorney for the Southern District of New York and former SEC Chair. He said Do Kwon’s actions – fleeing, giving misleading statements, and fighting extradition, show why a tough sentence is necessary.
Now, all eyes in the crypto sector turn to December 11, when Do Kwon will face sentencing in Manhattan federal court – poised to become of the most important and impactful ruling in crypto regulation after the FTX collapse. 

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#SEC #DoKwon #FTX #crypto #CryptoNews

The crypto market is facing renewed instability after crypto exchange FTX filed for bankruptcy, triggering widespread concern across centralized trading platforms. At the same time, Ethereum founder Vitalik Buterin confirmed a major protocol upgrade scheduled for December 2023, which aims to improve scalability and strengthen network security.
The simultaneous collapse of a major exchange and the announcement of an important Ethereum update has amplified volatility across the market, with traders re-evaluating risk and long-term expectations.
Ethereum’s December Upgrade Aims to Improve Scalability
Vitalik Buterin announced that Ethereum’s next upgrade will focus on enhancing scalability and security efficiency, addressing ongoing congestion and performance issues. Industry analysts expect the change to significantly improve the network's capabilities, potentially impacting multiple DeFi and Web3 sectors.
If successful, the upgrade may support Ethereum’s long-term goal of scaling global decentralized applications without compromising security.
Bitcoin Price Reacts to Market Stress
According to CoinMarketCap, Bitcoin is currently priced at $89,319.88 with a global market capitalization of $1.78 trillion. BTC declined 3.32% in the past 24 hours, extending its 90-day loss to 19.22%, while its fully diluted market cap sits at $1.87 trillion. Daily trading volume has surged to $62.68 billion, reflecting heightened uncertainty across major exchanges following the FTX collapse.
Regulators Scrutinize FTX’s Activities
The U.S. SEC and CFTC have already begun reviewing FTX’s operations for potential regulatory breaches. Rising calls for stronger oversight have emerged from industry leaders, who argue that investor protection must be prioritized to restore market stability.
Jane Smith, Lead Analyst at Market Insights, commented,“The recent downturn indicates a broader correction, and it’s essential for investors to reassess risk management strategies.”
Withdrawals Surge as Trust in Centralized Exchanges Declines
Following the bankruptcy announcement, several crypto exchanges reported increased withdrawal activity as users attempted to secure their assets. The resignation of Samuel Bankman-Fried, former CEO of FTX, has added further uncertainty. Stakeholders are now awaiting clear updates regarding the platform’s restructuring process and future operations.
The combination of FTX’s collapse and Ethereum’s upcoming upgrade is expected to shape near-term sentiment, potentially influencing both regulatory discussions and the direction of the broader crypto market.
The post appeared first on CryptosNewss.com
#FTX #bitcoin #Ethereum $FTT $BTC $ETH

Sam Bankman is on vacation for 25 years, so Do Kwon at least must get half, right bro? 😁
Prosecutors said: “The collapse of the Terraform market has caused a series of widespread crises in the cryptocurrency markets and contributed to what later became known as the 'Crypto Winter'.
Losses related to the Terraform incident have surpassed losses from the collapse of #FTX of Sam Bankman-Fried, #Celsius of Alex Mashinsky, and #OneCoin combined.

🧨 When the exchange fell, trust fell too

November 2022 brought the biggest shock to the crypto world since the days of Mt. Gox. The cryptocurrency exchange FTX, once a model of transparency and a 'safe path for Europe', collapsed within a few days. Customers across the continent discovered that their funds had vanished – along with the illusion that 'a big exchange = certainty'.

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🏦 Why did FTX like Europe?

The European Union was a strategic target for FTX:

Regulatory reputation: operating in the EU was meant to lend credibility to the brand