U.S. prosecutors plan to raise objections to Terra co-founder Do Kwon, who was extradited from Montenegro to Korea. According to reports, he could receive a lighter sentence than if he were extradited to the United States.
The U.S. Department of Justice (DOJ) said on March 7 that it would continue to pursue Do-Hyung Kwon’s extradition to the United States, challenging a Montenegrin court’s decision to extradite the Terraform Labs co-founder to South Korea.
The DOJ’s ruling comes after Montenegro’s High Court decided last week to extradite Terraform Labs co-founder Do-kwon Kwon to South Korea. Another Montenegrin court overturned its February 21 decision to extradite Dokwon to the United States, according to local media.
Mr. Kwon has appealed his extradition to the United States, and is facing civil charges filed by U.S. federal prosecutors on charges of fraud, fraud, and violations of securities laws by the Securities and Exchange Commission (SEC).
Last week, the National Police Agency requested assistance with the case from the international law enforcement agency Interpol, noting that South Korea first requested Kwon’s extradition.
Kwon’s lawyers have also said they would prefer him to be extradited to South Korea, where he faces fraud charges, but legal experts have suggested he could be acquitted or receive a lighter punishment from Korean courts.
In response to the decision in favor of South Korea, the U.S. Department of Justice said Friday that it “continues to seek Mr. Kwon’s extradition in accordance with relevant international and bilateral agreements and Montenegrin law.”
Terra Collapse and Kwon Hunting
Terraform Labs collapsed in May 2022 when its TerraUSD (UST) algorithmic stablecoin lost its peg to the U.S. dollar, which led to more of the company’s native token, LUNA, being printed to support UST. This caused LUNA to crash and the entire Terra ecosystem to collapse, wiping out approximately $60 billion from the digital asset space.
After the fiasco, Kwon disappeared after authorities in his native South Korea issued an arrest warrant for him in September on charges of violating Terraform Labs’ capital markets rules, although he denied any interpretation of his actions.
Following this, the SEC sued Terraform and Kwon in February 2023, accusing them of orchestrating a “fraudulent scheme” and violating securities laws by selling unregistered securities.
Montenegrin police arrested Kwon as he was trying to board a flight to Dubai, and Korean police soon confirmed his identity.
Just hours after Kwon was arrested in Montenegro, New York State prosecutors charged him with commodities fraud, securities fraud, financial fraud, conspiracy to defraud investors, and market manipulation.
This led to a war of words between South Korea and the United States with the Montenegrin authorities over who would be given the opportunity to bring Mr. Kwon to trial first.
In February, a court initially ruled that he should be extradited to the United States, but Montenegro’s appeals court later overturned it on March 5.
Now it appears South Korea has won the race to prosecute Terra’s co-founder.
Mr. Kwon’s extradition is still awaiting final approval from Montenegro’s Justice Minister Andrej Milovic, but if approved, he will be extradited along with Terra co-founder Shin Hyun-seung and former Finance Minister Han Chang-joon, who are currently on trial in Korea.
Example: Investigating criminal activity
Are you new to blockchain? To learn more about blockchain technology, check out CoinGeek’s Blockchain for Beginners section, our ultimate resource guide.