US federal prosecutors have asked a judge to sentence Terraform Labs co-founder Do Kwon to 12 years in prison. The request was filed today (Thursday) in the US District Court for the Southern District of New York. The sentencing hearing is scheduled for next week.

Kwon has asked the court to consider a prison term of five years. In filings ahead of the hearing in Manhattan, his lawyers said the 12-year sentence sought by prosecutors is “far greater than necessary.”

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They noted that Kwon has already spent nearly three years in custody, including time held in Montenegro. Under his plea agreement, he agreed to forfeit more than $19 million and several properties. His defense also said he may still face prosecution in South Korea for the same conduct.

Crypto Market Crisis Linked to Kwon

Prosecutors said the losses tied to Terraform were significant. The filing stated that “in just a few years, Kwon caused losses that eclipsed” those linked to Sam Bankman-Fried, Alexander Mashinsky, and Karl Sebastian Greenwood. It added that the Terraform collapse “triggered a cascade of crises” in the crypto market and contributed to what became known as the “Crypto Winter.”

US to Sentence Kwon This Week

US authorities first indicted Kwon in March 2023. The charges included securities fraud, wire fraud, market manipulation, and money laundering related to his role in the Terra blockchain project. After the collapse of Terra in 2022, Kwon’s location was unknown for several months. He was later arrested in Montenegro on unrelated charges and subsequently extradited to the United States.