The aftermath of the Terra-Luna collapse, negotiations over Do Kwon's sentence are underway

MidnightSeller · 2026-01-13T08:05:18+00:00

Do Kwon, founder of Terraform Labs, admitted to charges related to the collapse of the Terra-Luna ecosystem, causing losses of about $40 billion. Prosecutors seek a five-year sentence, while Kwon's defense argues against intent for personal gain and highlights external market manipulation, prompting discussions on cryptocurrency regulation and transparency.

MidnightSeller

2026-01-13 08:05:18

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The founder of Terraform Labs, Do Kwon, has admitted to all allegations of misconduct related to the collapse of the Terra-Luna ecosystem, marking a new phase in the legal battle. At that time, the losses incurred by investors due to the ecosystem collapse amounted to approximately $40 billion, making it one of the largest incidents in cryptocurrency history.

Legal Sentencing Debate

Currently, prosecutors are requesting a maximum of 5 years in prison for Do Kwon. However, Do Kwon’s legal representatives are appealing for leniency and presenting various circumstances.

The main arguments presented during the defense include emphasizing that Do Kwon had no intention of personal financial gain. Additionally, they cited complex market variables, strategic errors, and potential external market manipulation as causes of the collapse.

Defense’s Main Position

Do Kwon’s defense team is attempting to distribute responsibility through an analysis of the complex causes of the incident. They highlight Do Kwon’s early confession and willingness to cooperate, arguing that these factors could positively influence the resolution of the case. They also argue that Do Kwon should not bear all responsibility, citing allegations of market manipulation by third parties.

This case is sparking discussions about transparency and regulation in the cryptocurrency market, and attention is focused on how the final verdict will impact the industry.

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