Do Kwon Caught in Jurisdictional Battle Between US and South Korea

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Last Updated on May 6, 2023 by Bitfinsider

Do Kown, co-founder and former CEO of now-defunct Terraform Labs, Do Kwon, is facing extradition to South Korea and the United States after being caught in late March while attempting to flee Montenegro using a forged passport.

The South Korean citizen is being charged as a result of the stunning collapse of Terra’s algorithmic stablecoin TerraUSD (UST) and the platform’s native asset Luna, which saw over $40 billion dollars evaporate from the cryptocurrency market and spurred fears of industry contagion.

Despite US efforts to extradite him to North America, South Korean prosecutors are pressing for him to face criminal charges in his native country, stating it would be best for victims.

“Given the nature of this incident, we believe investigating the case in South Korea would be the most efficient way of bringing justice to investors,” said Dan Sung-han, leader of the South Korean team probing the crime.

According to Sung-han, who has over two decades of expertise, the majority of the essential evidence and accomplices associated with Do Kwon are located in South Korea. According to him, the launch and failure of both cryptocurrencies represent “systemic crime.”

Do Kwon and his associates face charges of fraud, capital-markets legislation violations, utilizing “trader bots” to manipulate transaction volumes, bribery, and a variety of other financial offenses.

Southeast Asian authorities have been investigating persons implicated in the collapse for nearly ten months, leading up to the recent indictments. According to Sung-han, if Do Kwon is found guilty, he will likely receive the country’s harshest prison sentence for a financial crime.

Meanwhile, in the United States, Kwon is facing criminal fraud accusations from federal prosecutors in New York, as well as a civil complaint from the Securities and Exchange Commission (SEC).

Lawyers for Terraform Labs’ former CEO have denied the allegations filed by the US, alleging they lack jurisdiction because the firm did not promote directly to Americans, and that neither cryptocurrency was officially regulated by the SEC.

Whether he will be extradited to South Korea or the United States will be decided once Montenegrin authorities finish their case against Kwon for passport fraud.

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