Terraform Labs Co-Founder Do Kwon's Extradition Lingers Amid Crypto Industry Crisis
Summary:
Terraform Labs co-founder Do Kwon is set to remain in Montenegro custody for an extended period, pending extradition to the United States. Both US and South Korea accuse Kwon of several criminal charges related to the collapse of Terra cryptocurrency, leading to his possible upcoming trials in both countries. The downfall of Terra in May 2022 marked the beginning of a wider crypto market decline.
The co-founder of Terraform Labs, Do Kwon, remains in custody in Montenegro pending extradition to America, where he is expected to stand trial for various criminal charges. As reported by Bloomberg on December 12, requests from the US and South Korean governments led Montenegro to prolong Kwon's incarceration for two more months after his initial sentence ended. Kwon was apprehended in March in Montenegro for utilizing forged traveling papers, which led to a four-month imprisonment term.
Kwon, a former Singapore resident of South Korean origin, faces charges in the US and South Korea for his supposed involvement in the downfall of Terra. As per a December 7 report by The Wall Street Journal, the US is set to gain custody of Kwon before South Korea does, with extradition requests from both nations currently pending.
The prosecutor anticipates Kwon may serve time in both the United States and South Korea for his alleged transgressions. If extradited to America, he is set to confront eight criminal allegations, including such serious offences as commodities fraud, securities fraud, wire fraud, and plotting to commit fraud and manipulate the market, all linked to his tenure at Terraform Labs. The US Securities and Exchange Commission (SEC) additonally accuses Kwon of swindling investors in cryptocurrency ventures.
Terra faced an abrupt downfall in May 2022, a key trigger for a broader downturn in the crypto market. The depegging of TerraUSD (UST) from the US dollar was followed by numerous companies declaring bankruptcy, notably Voyager Digital, BlockFi, Celsius Network, and FTX. A magazine article attributed Terra's crash to its reliance on overconfidence as collateral.
Published At
12/12/2023 8:32:19 PM
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