The legal pressure on Terra founder Do Kwon is mounting. While he is set to be sentenced in the United States on Thursday for two crimes, the American judge wants to know exactly what sentence awaits him in South Korea. The questions come at a critical moment, as the total prison duration could heavily depend on agreements between the different countries.
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Judge Doubts Fate of Crypto Boss #
U.S. District Judge Paul A. Engelmayer wants to impose a sentence on Kwon only after a series of crucial questions have been answered, according to recent court documents. Kwon is being prosecuted in the United States for misleading investors. The case continues to attract significant attention because the collapse of Terra in 2022 wiped out more than €40 billion.
Engelmayer wants to know if Kwon will serve his full sentence if he is transferred to South Korea. The judge is questioning what guarantees the U.S. has that Kwon will not be released early. He also wants clarity on the minimum and maximum sentences in South Korea, where Kwon is suspected of fraud and market manipulation. According to prosecutors, he could face up to forty years in prison there.
An important point is whether victims will have a say during the sentencing. Additionally, he wants to know what a compensation process should look like and what steps are necessary for it. Given the scale of the damages, this is a sensitive topic for many involved.
Both parties must respond to the judge’s questions by December 10 at the latest.
Uncertainty Over Sentence Length #
U.S. prosecutors are demanding twelve years in prison. Kwon’s lawyers consider a five-year sentence appropriate. The judge also wants clarity on the seventeen months Kwon was detained in Montenegro. The question is whether this period should be counted as pre-trial detention, which could shorten his eventual sentence.
Terraform built a system around the stablecoin TerraClassicUSD (USTC) and the Terra (LUNA) token. The algorithmic peg failed in May 2022, causing both coins to lose most of their value. The crash led to a chain reaction in the crypto market, bringing down major players who eventually collapsed.
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Outcome Has Impact on Prosecution of Crypto Fraud #
With these additional questions, it seems the judge wants to ensure all risks are covered and the position of victims is clear before sentencing. The case surrounding Do Kwon therefore remains in flux. The outcome could influence how international prosecution of crypto fraud is organized in the future.
The judge will impose the final sentence on December 11. However, the case will not be over then: both the United States and South Korea want to prosecute Kwon. Therefore, Engelmayer wants firm guarantees that Kwon will serve his full sentence, even if he is later transferred to foreign authorities.