Key Points: Do Kwon, the South Korean cryptocurrency entrepreneur behind the 2022 crash of two digital currencies that wiped out approximately $40 billion in market value, is set to be sentenced on Thursday in a New York federal court for fraud and conspiracy charges.

The 34-year-old co-founder of Singapore-based Terraform Labs and developer of the algorithmic stablecoin TerraUSD (UST) and Luna token previously pleaded guilty to misleading investors about the stability of a token designed to maintain a fixed value during market volatility.

Kwon became one of several high-profile crypto figures facing federal charges following the 2022 digital token crash, which triggered the collapse of multiple cryptocurrency firms.

U.S. District Judge Paul A. Engelmayer will deliver the sentence during a hearing scheduled for 11 a.m. local time in Manhattan (16:00 GMT).

Prosecutors have requested a prison term of at least 12 years, arguing that Kwon’s Terra ecosystem collapse caused billions in losses and cascading crises across crypto markets. His defense team seeks no more than five years, allowing him to return to South Korea to address separate criminal charges there.

In January, Kwon was charged with nine criminal counts, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering.

Authorities allege Kwon misled investors in 2021 about TerraUSD’s purported dollar peg, which was supposed to be algorithmically maintained. When UST lost its peg and fell below $1 in May 2021, Kwon falsely attributed its recovery to the "Terra protocol" algorithm, while secretly orchestrating a high-frequency trading firm to buy millions in UST to artificially inflate its price, court filings show.

Kwon pleaded guilty in August to conspiracy and wire fraud, apologizing in court: "I made false and misleading statements about the token’s peg restoration and concealed the trading firm’s involvement. My actions were wrong."

In 2024, Kwon and Terraform Labs reached a $4.55 billion settlement with the U.S. SEC, including an $80 million civil penalty for Kwon and a ban from crypto trading.

Kwon also faces charges in South Korea. Under his plea deal, U.S. prosecutors will not oppose his potential transfer to South Korea after serving half his sentence.