U.S. prosecutors are seeking a 12-year prison sentence for Terraform Labs founder Do Kwon, arguing that the collapse of Terra and Luna amounted to one of the largest frauds in crypto history. The request, filed in the Southern District of New York, highlights the scale of losses tied to TerraUSD (UST) and Luna’s algorithmic failure—an implosion that erased more than $40 billion and triggered widespread contagion across the digital asset sector.

In their filing, prosecutors said Kwon spent years misleading investors about TerraUSD’s stability, artificially inflating its perceived safety and contributing to the system’s eventual collapse. They argued that the fallout extended far beyond market volatility, calling Terra’s unraveling “a defining moment” that reshaped global regulatory scrutiny of crypto markets.

Kwon’s defense team has pushed for a significantly lighter sentence—up to five years—claiming that coordinated trading activity from third parties and broader market stress helped accelerate TerraUSD’s depeg. They cited research, including Chainalysis data, suggesting that external actors exploited structural weaknesses rather than Kwon deliberately engineering the collapse.

Kwon pleaded guilty in August to wire fraud and conspiracy charges. His criminal case stems from a March 2023 indictment that included commodities fraud, securities fraud, wire fraud and market manipulation allegations. The core of the case centers on TerraUSD, the algorithmic stablecoin designed to maintain a $1 peg through a balancing mechanism with its sister token, Luna. When that mechanism failed in May 2022, both assets collapsed rapidly, wiping out tens of billions in value and triggering insolvencies across multiple crypto firms.

Prosecutors are not seeking restitution, citing the complexity of calculating losses across global bankruptcy cases already underway. Instead, they requested forfeiture of roughly $19 million, noting that compensation efforts for victims will primarily be handled through restructuring processes tied to firms affected by Terra’s collapse.

Kwon’s legal challenges span multiple countries. After being arrested in Montenegro in March 2023 for attempting to travel on forged documents, he was extradited to the United States in December 2024 following competing requests by both the U.S. and South Korea. He also previously lost a civil case brought by the U.S. Securities and Exchange Commission, where a jury found that Terraform Labs and Kwon misled investors about TerraUSD’s mechanics and backing.

Sentencing is scheduled for December 11, marking a key moment in one of crypto’s most consequential legal sagas. While the ruling will conclude Kwon’s federal criminal case, numerous bankruptcy, civil and creditor proceedings tied to Terra’s collapse remain ongoing.

The enterprise Bitcoin holding company strengthens its balance sheet to neutralize dividend concerns and reinforce long-term BTC strategy.

Strategy, the enterprise-focused Bitcoin holding company led by CEO Phong Le, has established a $1.44 billion U.S. dollar reserve — a move designed to ensure the firm can meet all of its financial obligations without ever being forced to sell Bitcoin during market volatility.

In a recent interview, Le explained the reasoning behind the large cash buffer:

“We’re very much part of the crypto ecosystem and Bitcoin ecosystem… which is why we decided to start raising capital and putting U.S. dollars on our balance sheet to get rid of this FUD.”

A Defensive Buffer to Weather Market Cycles

Earlier this week, Strategy announced the creation of its $1.44B reserve, funded through a stock sale completed in just over a week. According to Le, the reserve will cover:

• Dividend payments on preferred stock
• Interest on outstanding debt
• At least 12 months of financial obligations, with plans to expand to 24 months

This dual-reserve model, Le noted, ensures the company maintains financial flexibility even during a Bitcoin downcycle, allowing it to avoid liquidating BTC to stay solvent.

Addressing Dividend FUD and Strengthening Investor Confidence

The initiative comes amid market chatter suggesting the firm may struggle to meet dividend and debt obligations if its stock price declines meaningfully. Le characterized this as pure “FUD,” stressing that Strategy remains fully capable of meeting its commitments.

The company’s decision to raise 21 months’ worth of dividend coverage was deliberate — meant to demonstrate that it can secure capital even when broader market sentiment turns bearish.

Last week, Le reiterated that Strategy would consider selling Bitcoin only if its stock fell below net asset value and if access to additional capital completely dried up.
To further increase transparency, the company launched a “BTC Credit” dashboard, showing it possesses more than 70 years of dividend-servicing capacity based on current assets.

Strategy now holds over 650,000 BTC, purchased at an average cost of $87,000 per coin, reinforcing its role as one of the largest corporate Bitcoin holders globally.

Corporate Bitcoin Treasuries Gain Influence as Miner Pressures Rise

Strategy’s financial maneuvering coincides with heightened stress on Bitcoin miners, who are facing increased production costs and shrinking margins following the most recent halving cycle. As miners’ BTC output tightens, analysts say institutional treasuries like Strategy’s have begun playing a larger role in overall market stability.

With miners reducing supply and volatility rising, corporate balance sheets — rather than mining rewards — are increasingly shaping investor sentiment. Many analysts view Strategy’s reserve as a sign of Bitcoin’s evolution as a corporate-grade asset, shifting from speculative acquisition toward disciplined financial management.

By minimizing liquidity risk and securing long-term operational capacity, Strategy positions itself as a stabilizing force in Bitcoin’s maturing market structure.

Attention all Terra (LUNA) holders! Binance, the world’s leading cryptocurrency exchange, has announced a temporary suspension of deposits and withdrawals for LUNA. This planned pause is a critical step to support a seamless network upgrade. If you use Binance for your LUNA transactions, here’s everything you need to know to navigate this brief hiatus confidently.

Why is Binance Suspending LUNA Services?
Binance will temporarily suspend deposits and withdrawals for LUNA starting at 12:05 p.m. UTC on December 8. The suspension supports an upcoming Terra blockchain upgrade. Exchanges often halt transfer services during major protocol updates to protect user funds. This is standard procedure and not a cause for concern.

What Does This Suspension Mean for You?
Here’s a breakdown of what is affected:

Deposits & Withdrawals: Paused — You cannot send LUNA to or from Binance during the suspension.
Trading: Unaffected — All LUNA spot and futures markets will remain fully active.
Existing Funds: Safe — LUNA held in your Binance wallet remains secure and unchanged.

This approach helps minimize disruptions while allowing the upgrade to proceed without risk.

How to Prepare Before the Suspension Begins
Complete all pending transfers well before 12:05 p.m. UTC on December 8.
Monitor Binance’s official channels for updates regarding when deposits and withdrawals will reopen.
Adjust trading plans if needed, since markets will stay open.

Benefits of the Network Upgrade
While the temporary pause may feel inconvenient, network upgrades generally aim to strengthen the Terra ecosystem by improving security, boosting performance, and enabling new features. These improvements support long-term growth and reliability.

Conclusion
Binance’s temporary LUNA suspension impacts only deposits and withdrawals—not trading. Your funds remain safe, and the planned upgrade is a positive step for the Terra ecosystem. Stay up to date by following Binance’s announcements, and be sure to complete any urgent transfers before the deadline.

Frequently Asked Questions (FAQs)

1. Can I still trade LUNA on Binance during the suspension?
Yes. Only deposits and withdrawals are paused. Trading will continue normally.

2. How long will the suspension last?
There is no fixed end time. It begins December 8 at 12:05 p.m. UTC and will resume once the upgrade is complete.

3. Are my LUNA tokens safe during the suspension?
Yes. All tokens in your wallet remain fully secure.

4. What happens if I try to deposit after the suspension starts?
Deposits after the start time may fail or be lost. Complete all transfers beforehand.

5. Will other exchanges suspend LUNA services too?
Many likely will. Always check your exchange’s official announcements.

6. What should I do if I urgently need to move LUNA?
Withdraw it before 12:05 p.m. UTC on December 8. After that, withdrawals will be unavailable until Binance restores service.

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