U.S. prosecutors are seeking a 12-year prison sentence for Terraform Labs founder Do Kwon, accusing him of orchestrating one of the most damaging crypto frauds in history. Authorities argue that his actions led to the $40 billion collapse of TerraUSD and LUNA, wiping out investor savings globally and destabilizing crypto markets. Prosecutors say Kwon misled investors about the stability of the algorithmic stablecoin and its reserves while secretly manipulating trading activity. The sentencing request follows his extradition fight and ongoing civil actions, marking a major step in holding Terraform leadership accountable.