Federal prosecutors are demanding a 12-year prison sentence for Terraform Labs co-founder Do Kwon for orchestrating the fraud that triggered TerraUSD’s catastrophic $40 billion collapse in 2022.

According to Bloomberg, the government described Kwon’s crimes as “colossal in scope” in a Thursday filing before US District Judge Paul Engelmayer, pointing to cascading market failures that ultimately contributed to FTX’s downfall.

Kwon will face sentencing on December 11, with his own legal team requesting just five years behind bars.

The 34-year-old South Korean entrepreneur pleaded guilty in August to conspiracy and wire fraud charges under an agreement capping prosecutorial recommendations at 12 years.

However, the statutory maximum reaches 25 years for his role in the algorithmic stablecoin fraud.

Prosecutors Highlight Systemic Market Damage

The Justice Department’s sentencing memorandum emphasizes that Kwon’s fraudulent statements to customers triggered a chain reaction across cryptocurrency markets.

Prosecutors specifically cited the collapse’s contribution to Sam Bankman-Fried’s FTX implosion as evidence of broader systemic damage beyond Terra’s immediate investor losses.

Kwon admitted in court that between 2018 and 2022, he “knowingly agreed to participate in a scheme to defraud purchasers of cryptocurrencies” from Terraform Labs.

He acknowledged making false statements about TerraUSD’s peg restoration mechanisms and concealing Jump Trading’s secret role in propping up the stablecoin during a May 2021 depeg event that foreshadowed the larger catastrophe.

The timing carries added significance, as the Trump administration has largely eased the tough-on-crypto enforcement actions, as the Biden administration did before.

Most recently, President Donald Trump pardoned Binance founder Changpeng Zhao on October 23 after his conviction for anti-money laundering program failures at the world’s largest crypto exchange.

Although the administration defended the pardon, claiming it was reviewed “with the utmost seriousness.”

Defense Cites Montenegro Detention and Dual Prosecution

Kwon’s attorneys argue that nearly three years in what they describe as “brutal conditions in Montenegro” should factor heavily into sentencing calculations.

His legal team emphasizes that more extended imprisonment proves “far greater than necessary” to achieve justice, particularly given the substantial punishment already endured during extended foreign detention.

The defense filing highlights Kwon’s agreement to forfeit over $19 million and multiple properties under the plea deal reached with prosecutors in the Southern District of New York.

His lawyers further note that Kwon still faces trial in South Korea for identical conduct, where prosecutors are seeking a 40-year prison term that creates additional consequences warranting consideration in the American sentence.

Do Kwon seeks a five-year sentence for Terra's $40 billion collapse while facing a separate 40-year prosecution in South Korea.#DoKwon #FTXhttps://t.co/Ex54HALudb

— Cryptonews.com (@cryptonews) November 27, 2025

Prosecutors notably aren’t pursuing restitution from the millions of investors who lost $40 billion, citing the excessive complexity of determining individual losses across global markets.

US authorities have indicated they will support Kwon serving the second half of his sentence in South Korea if he complies with the plea terms and qualifies under international transfer programs.

Sentencing Disparities Raise Deterrence Questions

The contrasting approaches to major crypto fraud cases have sparked debate over the consistency of punishment.

Bankman-Fried received 25 years, plus an $11 billion restitution order, after a trial conviction on all counts, though recent reports indicate that four years were later reduced from that sentence.

Kwon’s guilty plea significantly reduced his exposure despite Terra’s larger $40 billion loss compared to FTX’s $8 billion fraud.

Legal experts note that federal sentencing guidelines for fraud at Terra’s magnitude would typically suggest advisory ranges approaching life imprisonment before statutory caps, making Kwon’s five-year request face steep odds.

US agrees to recommend a 12-year prison sentence and a $19m fine for Do Kwon after he has pleaded guilty to wire fraud and conspiracy#DoKwon #TerraUSD https://t.co/ktCCrKzob4

— Cryptonews.com (@cryptonews) August 12, 2025

The Judge handling his case, Engelmayer, is known for the strict handling of financial fraud cases, and most observers expect sentences of 15 to 20 years, given the massive victim impact.

The December 11 hearing will determine whether cooperation through guilty pleas significantly reduces punishment compared to trial convictions, as in Bankman-Fried’s case.

Kwon was arrested in Montenegro in March 2023 while traveling under a fake passport, triggering a lengthy extradition battle between US and South Korean authorities.

He spent nearly two years detained in the Balkan nation before being sent to America in January, where his case became one of the most closely watched legal battles in cryptocurrency’s brief history.

The post Do Kwon Sentencing: US Wants 12 Years for Terra’s $40 Billion Crash appeared first on Cryptonews.

Two founders share their stories on how they approached two very different markets: teens in need of well-being advice, and formerly incarcerated individuals looking for work.

SAN FRANCISCO — Amazon showed off its latest robotics and AI systems this week, presenting a vision of automation that it says will make warehouse and delivery work safer and smarter. 

But the tech giant and some of the media at its Delivering the Future event were on different planets when it came to big questions about robots, jobs, and the future of human work. 

The backdrop: On Tuesday, a day before the event, The New York Times cited internal Amazon documents and interviews to report that the company plans to automate as much as 75% of its operations by 2033. According to the report, the robotics team expects automation to “flatten Amazon’s hiring curve over the next 10 years,” allowing it to avoid hiring more than 600,000 workers even as sales continue to grow.

In a statement cited in the article, Amazon said the documents were incomplete and did not represent the company’s overall hiring strategy.

On stage at the event, Tye Brady, chief technologist for Amazon Robotics, introduced the company’s newest systems — Blue Jay, a setup that coordinates multiple robotic arms to pick, stow, and consolidate items; and Project Eluna, an agentic AI model that acts as a digital assistant for operations teams.

Later, he addressed the reporters in the room: “When you write about Blue Jay or you write about Project Eluna … I hope you remember that the real headline is not about robots. The real headline is about people, and the future of work we’re building together.”

He said the benefits for employees are clear: Blue Jay handles repetitive lifting, while Project Eluna helps identify safety issues before they happen. By automating routine tasks, he said, AI frees employees to focus on higher-value work, supported by Amazon training programs.

Brady coupled that message with a reminder that no company has created more U.S. jobs over the past decade than Amazon, noting its plan to hire 250,000 seasonal workers this year. 

His message to the company’s front-line employees: “These systems are not experiments. They’re real tools built for you, to make your job safer, smarter, and more rewarding.”

‘Menial, mundane, and repetitive’

Later, during a press conference, a reporter cited the New York Times report, asking Brady if he believes Amazon’s workforce could shrink on the scale the paper described based on the internal report.

Brady didn’t answer the question directly, but described the premise as speculation, saying it’s impossible to predict what will happen a decade from now. He pointed instead to the past 10 years of Amazon’s robotics investments, saying the company has created hundreds of thousands of new jobs — including entirely new job types — while also improving safety.

He said Amazon’s focus is on augmenting workers, not replacing them, by designing machines that make jobs easier and safer. The company, he added, will continue using collaborative robotics to help achieve its broader mission of offering customers the widest selection at the lowest cost.

In an interview with GeekWire after the press conference, Brady said he sees the role of robotics as removing the “menial, mundane, and repetitive” tasks from warehouse jobs while amplifying what humans do best — reasoning, judgment, and common sense. 

“Real leaders,” he added, “will lead with hope — hope that technology will do good for people.”

When asked whether the company’s goal was a “lights-out” warehouse with no people at all, Brady dismissed the idea. “There’s no such thing as 100 percent automation,” he said. “That doesn’t exist.” 

Instead, he emphasized designing machines with real utility — ones that improve safety, increase efficiency, and create new types of technical jobs in the process.

When pressed on whether Amazon is replacing human hands with robotic ones, Brady pushed back: “People are much more than hands,” he said. “You perceive the environment. You understand the environment. You know when to put things together. Like, people got it going on. It’s not replacing a hand. That’s not the right way to think of it. It’s augmenting the human brain.”

Brady pointed to Amazon’s new Shreveport, La., fulfillment center as an example, saying the highly automated facility processes orders faster than previous generations while also adding about 2,500 new roles that didn’t exist before.

“That’s not a net job killer,” he said. “It’s creating more job efficiency — and more jobs in different pockets.”

The New York Times report offered a different view of Shreveport’s impact on employment. Describing it as Amazon’s “most advanced warehouse” and a “template for future robotic fulfillment centers,” the article said the facility uses about 1,000 robots. 

Citing internal documents, the Times reported that automation allowed Amazon to employ about 25% fewer workers last year than it would have without the new systems. As more robots are added next year, it added, the company expects the site to need roughly half as many workers as it would for similar volumes of items under previous methods.

Wall Street sees big savings

Analysts, meanwhile, are taking the potential impact seriously. A Morgan Stanley research note published Wednesday — the same day as Amazon’s event and in direct response to the Times report — said the newspaper’s projections align with the investment bank’s baseline analysis.

Rather than dismissing the report as speculative, Morgan Stanley’s Brian Nowak treated the article’s data points as credible. The analysts wrote that Amazon’s reported plan to build around 40 next-generation robotic warehouses by 2027 was “in line with our estimated slope of robotics warehouse deployment.”

More notably, Morgan Stanley put a multi-billion-dollar price tag on the efficiency gains. Its previous models estimated the rollout could generate $2 billion to $4 billion in annual savings by 2027. But using the Times’ figure — that Amazon expects to “avoid hiring 160,000+ U.S. warehouse employees by ’27” — the analysts recalculated that the savings could reach as much as $10 billion per year.

Back at the event, the specific language used by Amazon executives aligned closely with details in the Times report about the company’s internal communications strategy.

According to the Times, internal documents advised employees to avoid terms such as “automation” and “A.I.” and instead use collaborative language like “advanced technology” and “cobots” — short for collaborative robots — as part of a broader effort to “control the narrative” around automation and hiring.

On stage, Brady’s remarks closely mirrored that approach. He consistently framed Amazon’s robotics strategy as one of augmentation, not replacement, describing new systems as tools built for people.

In the follow-up interview, Brady said he disliked the term “artificial intelligence” altogether, preferring to refer to the technology simply as “machines.”

“Intelligence is ours,” he said. “Intelligence is a very much a human thing.”