Do Kwon, co-founder of Terraform Labs, has requested a maximum five-year prison sentence for his role in the $40 billion collapse of the TerraUSD stablecoin. He believes his nearly three years in custody, including harsh conditions in Montenegro, should count toward a lighter punishment. Kwon’s legal team filed the request with the Southern District of New York, claiming prosecutors’ recommended 12-year sentence is excessive. The former CEO pleaded guilty to conspiracy to defraud and wire fraud in August, avoiding trial after being extradited from Montenegro, where he was apprehended for attempting to flee with forged documents. His sentencing hearing is scheduled for December 11th in Manhattan. Kwon faces a statutory maximum of 25 years for his role in the algorithmic stablecoin fraud that wiped out billions in investor value. However, prosecutors agreed not to seek more than 12 years under the plea deal terms. Kwon’s lawyers argue he has suffered significant consequences for his crimes and maintains he still awaits trial for similar conduct in South Korea where a potential prison term of up to 40 years is being pursued. The co-founder acknowledged making false statements regarding the stability of TerraUSD, failing to disclose trading firm involvement in restoring the peg. His guilty plea included forfeiture of over $19 million and several properties. His case highlights ongoing legal battles and seeks to set precedents for how authorities approach crypto misconduct, moving beyond market failure towards criminal responsibility. The collapse of Terraform Labs triggered a domino effect of bankruptcies like Three Arrows Capital, Voyager Digital, Celsius Network, Genesis Asia Pacific, BlockFi, Alameda Research, and FTX.