I noticed that the courtroom drama surrounding Do Kwon is entering a decisive phase. Co-founder of Terraform Labs is officially asking the judge to limit his prison sentence to five years, although prosecutors are insisting on 12 years. This case has become a symbol of one of the biggest collapses in crypto history.

Do Kwon has already spent nearly three years in prison—most of it under quite harsh conditions in Montenegro before being extradited to the United States. His defense claims that this time plus the confiscation of over $19 million should be enough. But there’s a catch—Do Kwon is also facing charges in South Korea, where a 40-year sentence is demanded. This significantly complicates the situation.

In August, Do Kwon pleaded guilty to conspiracy and wire fraud. During the hearing, he stated that he voluntarily worked with others to deceive Terraform Labs investors and admitted that this was wrong. Officially, he could face up to 20 years for fraud and up to 5 years for conspiracy.

What happened to Terra? The collapse of the algorithmic stablecoin TerraUSD in spring 2022 wiped nearly $40 billion from the market. This triggered a cascade of liquidations, crashed LUNA, and created conditions that later contributed to FTX’s downfall. U.S. authorities called it one of the largest crypto scams.

It is expected that Judge Paul Adam Engelmeier will deliver the verdict on December 11. Analysts predict that the U.S. government will recommend a much harsher sentence than five years. Additionally, the SEC’s civil case against Terraform Labs and Do Kwon in 2024 ended with a jury verdict, which found that both defendants intentionally misled investors. This is a bad sign for his chances of significantly reducing his sentence.

Under a plea deal, Do Kwon could serve half the sentence in the U.S. and half in South Korea, but only if he fully complies with all conditions. It will be interesting to see what sentence the court ultimately hands down and how it will affect the overall attitude toward the crypto industry.