A U.S. district judge sent Terraform Labs founder Do Kwon on charges of defrauding investors, requiring questions to be answered before a hearing on Thursday, according to court documents.
Judge Paul A. Engelmayer of the Southern District of New York asked six questions, including whether Kwon’s victims would appear in court and whether he could avoid serving time if he was sent to South Korea, where he faces pending charges. The judge gave both sides until December 10 to answer his questions.
The collapse of Terraform, which had a market capitalization of over $50 billion at its peak, is a critical moment in the cryptocurrency market downturn in 2022.
“Assuming that Mr. Kwon is transferred to foreign custody to serve the second half of his sentence, how can the United States ensure that he will not be released before the end of the sentence imposed by this court?” the judge asked. He also asked if Kwon’s victims had “expressed an interest in being heard at sentencing?”
U.S. federal prosecutors are seeking a 12-year prison sentence for Kwon; his defense team is asking for a five-year term.
Engelmayer also asked for clarification on whether Kwon should receive a reduction from the roughly 17 months he spent in custody in Montenegro, what specific criminal risks he still faces in South Korea, how the victim compensation process will work, and whether he is eligible for a federal sentence reduction or should face supervised release.