Do Kwon Faces 40-Year Threat in South Korea as Defense Seeks 5-Year Cap in U.S.

Terraform Labs co-founder Do Kwon is fighting a legal battle on two fronts as he is begging for U.S. prosecutors to limit his prison term to five years as prosecutors in South Korea are weighing a potential 40-year sentence over his role in the collapse of the Terra ecosystem.His legal team argues that extending his U.S. punishment beyond five years would be excessive, given the harsh punishment that is awaiting him at home.🚨 LATEST: Do Kwon has asked a U.S. judge to limit his sentence to five years for the Terra collapse, even as he faces up to 40 years in a separate case in South Korea. pic.twitter.com/COdpaX9o8u— Cointelegraph (@Cointelegraph) November 27, 2025Kwon is urging the Manhattan federal court to adopt a five-year sentence, which he frames as proportionate given his nearly three years behind bars — including what his lawyers describe as “severe, punitive conditions” in Montenegro. The defense argues that a sentence longer than five years would be “far greater than necessary,” especially since he still faces potential decades-long punishment in South Korea.Under Kwon’s plea agreement, U.S. prosecutors committed not to seek more than 12 years. However, the presiding judge retains discretion to impose up to 25 years, leaving the final outcome uncertain.Following his extradition from Montenegro, Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to defraud in connection with Terra’s catastrophic $40 billion collapse in 2022. His team highlights that he has already endured significant personal and financial consequences, noting the years he has spent in custody and the global reputational fallout.Do Kwon arrested in Montenegro.What did he think he was a Bond villain? This place is too nice to hide out. pic.twitter.com/IoFSm1ojio— HORSE 🏴☠️ (@TheFlowHorse) March 23, 2023The plea deal also requires Kwon to forfeit more than $19 million in assets, including multiple properties — adding a heavy financial layer to the criminal penalties.Even after the U.S. case concludes, Kwon’s legal problems will intensify. South Korean prosecutors are preparing their own criminal sentencing recommendation, reportedly eyeing up to 40 years in prison for his role in the Terra collapse — a punishment reflecting the scale of losses to local retail investors and the broader impact on the country’s crypto markets.So $LUNA Do Kwon is asking a US judge to lower his prison term to 5 YEARS, while South Korean prosecutors are pursuing up to 40 YEARS in a separate case.I’d rather see all his wallets and TFL’s $LUNC wallets burned. Let’s see that. 💎🤲🏻 #Cryptopic.twitter.com/a3pxjftvuc— Mr. Diamondhandz1💎 (@MrDiamondhandz1) November 28, 2025This looming prosecution is central to Kwon’s argument for leniency in the U.S., with his defense stressing that any lengthy American sentence would stack atop a potentially decades-long term in Seoul, compounding his total time behind bars.U.S. District Judge Paul Engelmayer is scheduled to sentence Kwon on Dec. 11, with prosecutors expected to file their recommendation days before the hearing. Kwon’s legal saga began after months on the run following the Terra crash, before he was arrested in Montenegro for traveling with falsified documents. He served four months there before being extradited to the United States.Kwon’s case now sits alongside other major crypto criminal prosecutions — including that of former FTX CEO Sam Bankman-Fried, who is currently appealing his 25-year U.S. sentence.