Police officers escort Do Kwon, center, in Podgorica, Montenegro, in this May 11, 2023 file photo. EPA-Yonhap
Extradition decision comes 11 months after Kwon’s arrest in Montenegro
By Anna J. Park
Terraform Labs co-founder Do Kwon, who was apprehended in Montenegro over his alleged involvement in a $40 billion cryptocurrency fraud, is slated for extradition to the United States where he could potentially face a more severe sentence compared to what he might receive in Korea.
U.S. and Montenegrin media outlets have reported that the High Court in Podgorica, the capital of Montenegro where Kwon was arrested in March while attempting to board an airplane with a fake passport, has decided to extradite him to the United States.
The court stated that “Do Kwon will be extradited to the U.S. to face charges related to crimes committed in financial operations,” according to a report by Pobjeda, a local news outlet.
The court did not disclose specific reasons for the decision.
The U.S. Attorney’s Office charged Kwon on eight criminal counts, including conspiracy to defraud, commodities fraud, securities fraud, wire fraud and conspiracy to engage in market manipulation, shortly after his arrest in the Southeastern European country.
The fallen crypto mogul is also facing civil charges filed by the U.S. Securities and Exchange Commission (SEC) alleging that he misled investors with a multi-billion dollar crypto asset securities fraud. The trial for this case is scheduled to commence late next month, after the U.S. District Court postponed it from Jan. 29 to March 25, with no further delays anticipated.
The extradition decision came around 11 months after his arrest in Montenegro, and 22 months since he fled overseas.
The request by the Korean government to extradite him to his native country was ultimately rejected. Kwon had also hoped to be extradited to Korea, probably due to the general tendency of the U.S. to dole out much harsher sentences for fraud cases.
While Korea’s maximum penalty for economic crimes is about 40 years, the U.S. can impose jail terms of over 100 years as American courts aggregate penalties for each count. For instance, FTX founder Sam Bankman-Fried, who is also charged with various criminal counts over his cryptocurrency business, is expected to receive up to 110 years in prison in a verdict slated for March.
It is estimated that the damage suffered by global investors from the collapse of terraUSD (UST), the so-called “stable coin,” amounts to over $40 billion. Despite Terraform Labs’ initial design to maintain a one-to-one fixed exchange rate with the U.S. dollar through exchange mechanisms with its sister coin Luna, the operational system collapsed with a major sell-off crisis in May 2022.
Korean internet users, including many coin investors directly hurt by Kwon’s cryptocurrency, seem to welcome the Montenegrin court’s decision, with some even saying it is “the best news this year.”
“This is what you get when you’ve brought tears to the lives of countless people around the world. Goodbye,” an internet user wrote on a comment section of an article reporting Kwon’s extradition to the U.S.
“As you have indirectly ruined the lives of at least a thousand people, I hope you get what you deserve in the U.S., where there’s no parole for a hundred years,” another said, sharing a similar sentiment on the internet board.
Some pointed out that Kwon made the wrong choice when he decided to flee from the country in April 2022.
“Kwon must be regretting the fact that he chose to flee overseas. Why flee from a country as good as Korea? He could have just been arrested, confessed readily, enjoyed VIP treatment, while forming a luxurious team of pricey legal counsels,” one netizen commented sarcastically, as the Korean legal system is known to be quite lenient on jail terms for fraud cases.
“Confiscate all the assets that flowed into the family, and I hope the family members reflect on themselves and live with remorse for the money they earned through sweat,” another said.
A month prior to the outbreak of the scandal, Kwon departed for Singapore in April 2022 and disappeared. He later traveled through the United Arab Emirates (UAE) and Serbia before arriving in Montenegro. He was arrested in late March last year at a local airport, while attempting to board a private jet bound for Dubai with a fake Costa Rican passport.
Kwon studied computer science at Stanford University and received his bachelor’s degree in 2015. After graduating from Stanford, Kwon worked at Apple and Microsoft as an engineer, before establishing Terraform Labs in 2018.
