One of the most controversial figures in the crypto world is approaching judgment day. Do Kwon, co-founder of the collapsed Terraform Labs project, is scheduled for sentencing on Thursday, December 11, after pleading guilty to two felony charges: wire fraud and conspiracy to commit fraud.

But before Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York delivers his ruling, he has taken an unusual step. The judge has requested detailed information about the criminal penalties Kwon faces in South Korea and Montenegro, where the former CEO was previously arrested for using falsified travel documents.

The request was made public in court filings dated December 8. Engelmayer has asked both Kwon’s defense team and federal prosecutors to clarify the exact charges pending in South Korea, the minimum and maximum possible prison terms, and the likelihood of early release should Kwon be extradited after serving time in the United States.

Judge Engelmayer wants clarity: Could Kwon serve years in South Korea after U.S. sentencing?

Engelmayer’s chief concern is that if Kwon is eventually returned to South Korea, local authorities might grant him a significantly shorter sentence than what he receives in the United States.

This issue is critical because:

  • South Korea is pursuing its own extensive criminal case against Kwon

  • The potential penalties there could reach decades in prison

  • The U.S. court does not want Kwon to choose a jurisdiction with more lenient outcomes

Meanwhile, Kwon already spent four months in a Montenegrin prison for attempting to travel with falsified passports. Judge Engelmayer is now examining whether that time will count toward any U.S. sentence — both sides reportedly agree it should not.

The fall of Terra was catastrophic — and the court knows it

In 2022, Kwon was one of the most influential figures in the crypto industry. His algorithmic stablecoin system TerraUSD (UST) and LUNA was hailed as one of the boldest experiments in decentralized finance.

When the system collapsed, the consequences were devastating:

  • tens of billions of dollars evaporated

  • dozens of companies failed

  • global investor panic spread

  • the broader crypto market plunged into crisis

Analysts described Terra’s collapse as one of the most destructive events in crypto history.

This is why prosecutors are demanding at least 12 years in prison, while Kwon’s lawyers argue the maximum sentence should be no more than five years.

Prosecutors say the damage exceeds FTX, Celsius and OneCoin combined

A newly released statement from U.S. authorities argues that Kwon’s misconduct caused greater financial harm than the combined losses attributed to:

  • Sam Bankman-Fried (FTX)

  • Alex Mashinsky (Celsius)

  • Karl Sebastian Greenwood (OneCoin)

Together.

This comparison is extraordinary — and underscores why the upcoming sentence is being watched worldwide.

Kwon could face up to 40 years in South Korea — even after a U.S. conviction

Kwon’s legal team acknowledges that even if the U.S. court credits some of his previous detention, the CEO will still be returned to South Korea, where additional charges await him.

According to sources familiar with South Korean law, he could face up to 40 years in prison based on his citizenship and the severity of the allegations.

Thursday’s sentencing hearing is therefore pivotal. It may close the U.S. chapter of the Terra disaster — while South Korea prepares its own.

From international fugitive to arrest in Montenegro

When Terra collapsed in 2022, Kwon disappeared.

For months, no one knew where he was.

His whereabouts were finally revealed after he was arrested in Montenegro, a country where he allegedly attempted to travel on falsified documents. This arrest triggered an international chain of legal proceedings.

The first U.S. charges were filed in March 2023.


A verdict that could define how crypto crimes are punished worldwide

Judge Engelmayer will issue the sentence on December 11.

Will he follow prosecutors’ demands for a harsh penalty?

Or will he consider the international legal complexities and impose a shorter term?

One thing is certain: given the enormous scale of the UST and LUNA collapse, this ruling will not be just about Do Kwon.

It may set a global precedent for how crypto-era fraud is judged and punished.

#DoKwon , #TerraLabs , #CryptoCrime , #CryptoFraud , #CryptoNews

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