Do Kwon has been detained in Montenegro for 11 months. Photo by Filip Filipovic/Getty Images.
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Key Takeaways
A court in Montenegro has ruled that Do Kwon can be extradited to the USA.
The Terraform Labs founder had been subject to competing extradition claims from American and Korean authorities.
In the US, Kwon faces a multiple civil and criminal fraud charges.
Last year, a Montegrin court sentenced Terraform Labs CEO Do Kwon to prison for traveling with a fake passport. After that, authorities in the US and Korea both requested his extradition. Subject to competing claims, the courts will determine Kwon’s fate.
As reported by the Wall Street Journal on Wednesday, February 21, the High Court in Podgorica has ruled that Kwon may be extradited to the US. If and when that happens, he will face multiple fraud charges.
Kwon vs. the SEC
Kwon should appear in court to face civil charges brought by the US Securities and Exchange Commission (SEC) next month.
Initially scheduled for January 29, Judge Jed Rakoff delayed the trial until March 25 to allow more time for the extradition process.
Today we charged Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon with orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.
— U.S. Securities and Exchange Commission (@SECGov) February 16, 2023
According to the SEC’s complaint, “Kwon raised billions of dollars from investors by offering and selling an inter-connected suite of crypto asset securities”. It adds that “many” of them were in unregistered transactions.
SEC Chair Gary Gensler said at the time: “We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD.”
However, the SEC isn’t the only agency lining up to prosecute the alleged fraudster.
Terrafrom Founder Faces Criminal Charges
The SEC’s lawsuit is not the only legal case facing the Terraform founder, however. Also, prosecutors working for the US Department of Justice have charged Kwon with eight counts of fraud for his role in the collapse of LUNA and UST in 2022.
Meanwhile, the Seoul Southern District Prosecutors Office has issued arrest warrants for Kwon and other Terraform founders who have been indicted for violations of South Korea’s capital market laws. Earlier this month, former Terraform CFO Han Chang-Joon was succesfully extradited to South Korea.
Kwon, however, may not return to Korea for a long time, if ever. If found guilty in the US, he is likely to face a lengthy prison sentence.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
