One of the most scandalous figures in crypto history may end up facing a much softer outcome than many expected. Do Kwon, the creator of the collapsed Terraform Labs, is officially asking an American court to limit his sentence to five years for fraud that led to the loss of nearly $40 billion in the market. It sounds almost ridiculous given the scale of the disaster, but here’s the interesting part—his defense has already secured a guilty plea, which spared him from a full trial.

Do Kwon spent nearly three years in prison, with most of that time in harsh conditions in Montenegro, where he was arrested for using forged documents. His team argues that this is enough, especially considering the $19 million already confiscated and other assets. It sounds like an attempt to play on sympathy, but there’s another twist: Do Kwon is also facing charges in South Korea, where prosecutors are seeking a 40-year sentence. That creates an intriguing scenario in which a sentence in the U.S. could be served, at least in part, there.

Federal Judge Paul A. Engelmayer of the Southern District of New York is expected to issue a ruling on December 11. Analysts are skeptical of the defense’s request—prosecutors are expected to seek substantially more, although under a plea deal they agreed not to ask for more than 12 years. Technically, Do Kwon could receive up to 20 years for wire fraud and up to 5 years for conspiracy.

At trial, Kwon himself admitted guilt and read a statement saying he voluntarily worked with others to deceive clients. His words sounded like genuine remorse, but the SEC’s civil case in 2024, in which jurors found that he intentionally misled investors, seriously weakened his position.

The collapse of TerraUSD in 2022 remains one of the most devastating events in crypto history. It didn’t just trigger liquidations and the collapse of LUNA—it also created conditions that brought down other platforms, including FTX. U.S. authorities call it one of the largest crypto scams. Therefore, no matter how much Do Kwon asks for five years, the judge is unlikely to agree to such a lenient stance. Crypto history is full of high-profile cases, but Kwon’s case is a lesson in how algorithmic stablecoins and the lack of oversight can lead to a catastrophe on a scale that shakes the entire market.