There has been a new development in the Terra ecosystem collapse case—U.S. prosecutors have officially submitted documents to the court, requesting a 12-year prison sentence for co-founder Do Kwon. This sentence isn’t arbitrary; it is based on the upper limit of the plea agreement signed by both parties in August this year.

Interestingly, the prosecution specifically compared Do Kwon's case with FTX's Sam Bankman-Fried (SBF) in their sentencing recommendation. SBF was sentenced to 25 years for fraud involving about $8 billion; meanwhile, Do Kwon’s actions resulted in losses exceeding $40 billion—almost five times the former amount. But why is the sentence only half as long? The prosecution explained that sentencing must reference similar cases to avoid “unreasonable disparities.”

Let’s go back to the global shockwave in 2022. The UST stablecoin and LUNA token went to zero within days, wiping out over $40 billion and leaving countless investors with nothing. This also triggered a chain reaction—Three Arrows Capital went bankrupt, a leading exchange faced a bank run, and the entire crypto market plunged into a deep freeze. The prosecution described this disaster as having a “contagion effect,” believing its destructive power even exceeded the case of Celsius founder Alex Mashinsky (who was involved in about $5 billion and also sentenced to 12 years).

Do Kwon’s legal team tried to seek a sentence reduction of about five years, arguing “youth and lack of experience.” But this reasoning clearly didn’t persuade the prosecution—the Department of Justice directly cited his history of fleeing with a fake passport, emphasizing that “post-crime evasion aggravated the wrongdoing.” The Manhattan federal court will make a final judgment on December 11.

Behind this case lies a bigger question: What standards should be used to sentence crypto-related fraud? Should the “emerging nature” and “technical complexity” of the industry be taken into account and show some leniency, or should it be treated as strictly as Wall Street financial crimes? Judging from the current attitude of U.S. regulators, the answer seems clear—whether it’s blockchain or traditional finance, fraud is fraud, and punishment is due.

What does this “equal treatment” approach to law enforcement mean for the entire crypto industry? It may be redefining the rules of the game in this field.