A dramatic twist is unfolding around Terraform Labs co-founder Do Kwon, with U.S. authorities urging a New York court to impose a 12-year federal sentence following his fraud conviction — even as the token tied to his failed project, LUNA, suddenly experienced a sharp price rebound.
The request, lodged ahead of Kwon’s sentencing hearing next week, accuses him of inflicting unmatched market damage, claiming his actions eclipsed losses attributed to multiple high-profile crypto collapses combined. Officials cited Terra’s implosion as a spark that ignited the industry-wide freeze known as “Crypto Winter.”
A Collapse Followed by a Chase Across Borders
Kwon disappeared from public view in the aftermath of Terra’s 2022 collapse before being located months later in Montenegro, where he was arrested on unrelated offences. He was eventually handed over to the United States, where a sweeping prosecution awaits him on fraud, manipulation, and money-laundering charges tied to Terraform’s operations.
Defense Pushes for Leniency — But Another Trial May Be Waiting
Kwon’s lawyers are making a very different case, telling the court their client should receive no more than five years, warning that a conviction in the U.S. may be just the beginning. South Korean authorities have their own criminal proceedings in motion, potentially exposing him to decades of additional prison time once he is deported.
According to their argument, Kwon will transition directly from American custody to immigration detention, then into Seoul’s pretrial system without a moment of freedom in between.
A Curious Market Reaction: LUNA Rallies
In an unexpected development, LUNA—the remnants of Terraform’s collapsed ecosystem—spiked over 40% following publication of the sentencing recommendation. It now trades around $0.10, far from its $19 peak before the crash but still registering notable speculative interest driven by the high-profile legal drama.
The sentencing outcome remains uncertain. The presiding judge may issue a punishment far lighter or significantly harsher than either side suggests.
