Kwon Do proposes to limit the sentence to 5 years in the Terra collapse case, facing legal pressure from multiple countries

Overview of the Situation

• The individual case in South Korea is seeking a sentence of up to 40 years, creating significant legal pressure from both sides
• Kwon Do has just filed a petition to the US court, proposing a maximum sentence of 5 years
• This event reflects the global impact of the Terra failure in 2022, wiping out approximately $40 billion from the cryptocurrency market

South Korea continues to increase legal pressure

The co-founder of Terraform Labs is under legal pressure from two court systems. South Korean prosecutors are not slow in handling the private case related to the aftermath of Terra, which is believed to be seeking a sentence of up to 40 years in prison. The decisions by South Korean authorities could significantly affect market sentiment, especially for those affected by the collapse of LUNA, UST, and the entire Terra ecosystem.

Kwon Do’s legal strategy in the US

As a strategic move, Kwon Do’s legal team filed a petition on Wednesday to the US federal court, proposing that the sentence should not exceed 5 years. Their argument focuses on the hardships he has endured, particularly nearly three years of detention in Montenegro, “with more than half of that time under harsh and inhumane conditions.”

According to the plea agreement signed in August, Kwon Do pleaded guilty to two charges of wire fraud and conspiracy to commit fraud after being extradited from Montenegro. US prosecutors agreed not to pursue a sentence exceeding 12 years, but the legal team argues that a sentence over 5 years is unnecessary. Additionally, Kwon Do has committed to surrender more than $19 million and other assets as part of the agreement.

Context and Market Impact

The collapse of Terra in 2022 is considered one of the most shocking events in cryptocurrency history, erasing about $40 billion from the market and triggering investigations worldwide. Millions of investors were wiped out, and this event has put significant pressure on regulators to act.

The US court’s decision will be highly significant not only for Kwon Do but also for the overall sentiment of the cryptocurrency market. The upcoming ruling on December 11 by US District Judge Paul Engelmayer in Manhattan will determine the appropriateness of the punishment in large-scale cryptocurrency fraud cases.

Other Legal Challenges in the Industry

Kwon Do is not the only one in the industry facing strict legal scrutiny. Former FTX CEO Sam Bankman-Fried, who received a 25-year sentence earlier this year, is currently appealing his case, claiming that the initial trial was unfair. These cases reflect a trend in the industry facing increased legal oversight from global authorities.