Will the US Convict Crypto Kingpin Before South Korea Extradition?

Former Terra Luna crypto kingpin Do Kwon will be extradited to South Korea to face fraud charges related to the collapse of Terra Luna. A Montenegrin court ruled in favor of South Korea in a court proceeding yesterday.

A judge ruled yesterday that Kwon will go to South Korea following a competing request from authorities in the US, meaning that the US Securities and Exchange Commission will have to lobby for extradition to face fraud charges in the US.

How Crypto Kingpin Do Kwon’s Fate Was Decided

Earlier this year, a Montenegrin court’s ruling to allow Kwon’s extradition to the US was denied by the Appeals Court of Montenegro. Kwon’s lawyers argued that South Korea submitted its extradition request first and should be given preference over the US.

The decision on where to extradite Kwon was made based on several factors. These include the alleged crime’s severity and location, which country filed a request for first, and other factors.

South Korea issued an arrest warrant for Kwon in September 2022, while US authorities charged him in March 2023. Therefore, Kwon’s lawyers successfully argued from a procedural standpoint that Kwon should be moved to South Korea. His lawyer, Goran Rodic, confirmed the date in February 2024 but could not be reached for further comment.

“Kwon finishes serving his sentence on March 23 and will be extradited after that. That’s all I can say now,” Rodic said.

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Regulators in both South Korea and the US want Kwon to face charges of a $40 billion fraud following the collapse of the Terra Luna ecosystem in 2022.

The UST token, whose value depended on an arbitrage relationship with its sister token, Luna, lost over 90% of its value following mass UST withdrawals on Curve Finance.

The drop caused the Terra Luna algorithm to print more LUNA. The price of LUNA then plummeted. Together, the declines in both tokens wiped approximately $40 billion off crypto markets and damaged investor confidence in crypto.

Crypto Bosses’ Failed Escapes

Following the collapse of Terra Luna, Kwon evaded law enforcement’s attempts to locate him. In late 2022, South Korea asked Interpol to place Kwon on a Red List to apprehend him on sight.

Montenegrin authorities eventually arrested the former mogul as he tried to flee the nation.

Kwon said he would prefer to move to South Korea to be closer to family. He is serving jail time after being convicted of passport fraud last year. An appeals court previously overturned a decision to move Kwon to the US. This means that the US will have to fight to get him to stand trial.

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Meanwhile, the former CEO of crypto exchange FTX, Sam Bankman-Fried, will also face a trial for crypto fraud later this year. Unlike Kwon, Bankman-Fried’s extradition occurred quickly after authorities arrested him in the Bahamas.

Having already been convicted of fraud, the former crypto mogul will be sentenced on March 28, 2024.