Terra Founder Do Kwon Faces Possible 12-Year Prison Term As DOJ Pushes For Maximum Sentence

The U.S. Department of Justice is urging a federal judge to impose a full 12-year prison sentence on Terra founder Do Kwon, citing the scale of the multibillion-dollar fraud that triggered one of crypto's worst collapses.

What Happened: Under his August plea deal, Kwon faces a maximum request of 12 years, though the underlying charges of conspiracy to defraud and wire fraud could carry up to 25 years.

Prosecutors argue the top-end sentence is warranted, noting that Kwon's $40 billion Terra–LUNA implosion caused more damage than several comparable cases.

The DOJ specifically pointed to Sam Bankman-Fried's 25-year sentence as a benchmark, while rejecting comparisons to Celsius founder Alex Mashinsky's 12-year term. They emphasized that Kwon's alleged attempt to flee using a fake passport, combined with the global fallout of Terra's collapse, justified a harsher penalty, Decrypt reported on Friday.

Kwon, extradited from Montenegro after a months-long jurisdictional battle, is scheduled for sentencing on Dec. 11 in Manhattan federal court.

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Why It Matters: The DOJ's request comes just as Kwon petitioned the court to limit his sentence to five years, arguing that he has accepted responsibility for his role in the Terra collapse.

But prosecutors maintain he presided over one of the largest fraud-driven failures in crypto history, wiping out $40 billion in market value and sparking a chain reaction of bankruptcies and contagion across the industry.

UST and LUNA's sudden implosion in May 2022 devastated retail investors, lenders, and hedge funds globally, reshaping the regulatory landscape and fuelling worldwide investigations.

Kwon's sentencing next week will close one of crypto's most high-profile criminal chapters, but its ripple effects continue to influence enforcement trends, stablecoin scrutiny, and institutional risk management.

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