U.S. Prosecutors Renew Challenge Against Do Kwon’s Extradition to South Korea

Terra’s founder, Do Kwon, is embroiled in a legal dispute between the United States and South Korea regarding which country will successfully extradite the cryptocurrency entrepreneur.

In a statement to Bloomberg on March 8, the U.S. Department of Justice expressed its ongoing expectation to bring Kwon to U.S. territory, despite a recent high court ruling that overturned those intentions.

The Do Kwon Extradition Dispute

“The United States remains committed to pursuing Kwon’s extradition in line with applicable international and bilateral agreements as well as Montenegrin law,” the Justice Department stated. “The United States values the collaboration of the Montenegrin authorities in ensuring that all individuals adhere to the rule of law.”

Conversely, South Korea is intensifying its attempts to secure Kwon’s extradition. On Thursday, the National Police Agency of South Korea dispatched a letter to the International Criminal Police Organization (Interpol) seeking assistance in extraditing Kwon from a prison in Montenegro.

This action followed a High Court decision earlier this week that annulled a previous ruling to extradite the cryptocurrency entrepreneur to the United States, due to inaccuracies regarding the sequence in which South Korea and the U.S. submitted their requests. Prior to this, a lower court had approved the U.S. extradition on two occasions.

Both countries are pursuing Kwon on allegations tied to his now-defunct Terra blockchain, an algorithmic stablecoin network whose dramatic collapse erased $44 billion in investor value in May 2022. The fallout from this collapse led to significant failures at prominent firms such as Three Arrows Capital, Celsius, and FTX.

The U.S. Securities and Exchange Commission (SEC) has subsequently charged Kwon with numerous counts of fraud for intentionally misleading investors, including the sale of the platform’s native LUNA token as an unregistered security.

A Preference For South Korea

Extradition to South Korea would be advantageous for Kwon, as his legal team favors this option, which is perceived to potentially result in a more lenient sentence.

Terrence Yang, Managing Director at Swan Bitcoin, remarked that extraditing Kwon to South Korea would be a “travesty” for victims seeking appropriate justice.

“The U.S. likely has the highest number of victims in terms of both quantity and financial loss,” Yang stated. “It seems somewhat absurd for the Montenegrin court to extradite Do Kwon to South Korea, where he might receive an acquittal or an absurdly light sentence compared to what he would face in the United States.”

A U.S. court has already found FTX founder Sam Bankman-Fried guilty of multiple fraud charges, for which he could potentially serve decades in prison.

A collective of South Korean Terra investors has also urged for Kwon to be extradited to the U.S., asserting that he would encounter “appropriate punishment.”

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