Do Kwon pleads guilty but seeks a lighter sentence of "5 years in prison"! Is that possible? TerraUSD initially evaporated 40 billion USD.

Terra founder Do Kwon pleaded guilty in the U.S. seeking a “sentence of less than five years.” He claimed that his imprisonment in Montenegro had already paid the price, while South Korean prosecutors still demanded a 40-year sentence, with a ruling set for December 11 this year. (Background: Do Kwon admitted to fraud: I deceived investors who bought UST/LUNA, I am very sorry… hoping for a significant reduction in sentence) (Additional context: Do Kwon is rumored to plead guilty! After the LUNA crash, he faces nine criminal charges including fraud and money laundering) Three years ago, the algorithmic stablecoin TerraUSD collapsed, evaporating 40 billion USD. Now, the main character of the incident, Do Kwon, walks into the federal court in Manhattan, New York, aiming to persuade the judge to reduce his sentence to less than five years. He emphasized that his nearly three years of detention in Montenegro “has already paid the price” and agreed to the prosecution's seizure of 19 million USD in assets, which Do Kwon believes demonstrates his sincerity. Whether this can move the judge remains uncertain. How much reduction in sentence can a plea agreement achieve? According to Bloomberg reports, Do Kwon's defense team submitted a sentencing recommendation to Judge Paul Engelmayer, arguing that the sentence should not exceed five years. Do Kwon had pleaded guilty to conspiracy and wire fraud on August 12, with a maximum sentence set at 12 years by the prosecution. The lawyers switched to a humanitarian argument, stressing that the conditions during his detention in Montenegro were “very harsh” and far exceeded “the realization of justice.” In addition to seizing the cash and properties previously held by Do Kwon, the team did not propose any further compensation plans. The prosecution has not yet responded, and the case will be ruled on December 11 this year. The death spiral of the 40 billion USD crash The controversy stems from the design of Terra's algorithmic stablecoin, which maintained a 1:1 peg to the USD by issuing sister coin LUNA to absorb fluctuations. To quickly attract funds, Terra launched the Anchor Protocol, boasting an annual yield of 20%. At that time, market confidence wavered, leading to a frenzy of LUNA redemptions. The arbitrage mechanism was magnified, resulting in a “death spiral” that triggered the collapse of TerraUSD, with LUNA's price plummeting from 80 USD to less than 0.1 USD within a few days, accumulating losses of about 40 billion USD, which also severely impacted the entire DeFi ecosystem on the chain. After the crash, Do Kwon first appeared in Singapore and then in Serbia, ultimately being arrested in Montenegro in March 2023 for holding a fake passport. The defense described that period of imprisonment as “dark and without light,” attempting to persuade the judge to offset past suffering against future sentences. The Montenegrin court rejected South Korea's extradition request this year, deciding to extradite Do Kwon to the U.S. for trial first. If he is indeed lightly sentenced, it does not mean that Do Kwon's legal troubles will end there, as prosecutors in Seoul have repeatedly hinted at seeking a 40-year sentence for him. Once Do Kwon completes his sentence in the U.S., South Korea is likely to initiate a secondary extradition process immediately. Related reports: Notional Labs CEO: The culprit behind Luna's crash is not Do Kwon; the mastermind remains at large. SEC demands Terra and Do Kwon to pay a massive fine of 5.3 billion USD. <Do Kwon pleads guilty but seeks a light sentence of “within 5 years”! Is it possible? TerraUSD initially evaporated 40 billion USD> This article was originally published in BlockTempo, the most influential blockchain news media.