Former Terraform Labs CEO set to be extradited to the US after a private comment by Montenegro’s Justice Minister.
Do Kwon is currently facing extradition to both the US and South Korea after being charged with multiple counts including fraud. 

Do Kwon, a South Korean national and the former CEO of Terraform Labs, the company behind the stablecoin TerraUSD that collapsed in 2022 to send the entire crypto market plummeting, was arrested In March this year. He was detained with the former finance officer for Terraform Labs Han Chang-joon at the airport in Podgorica, the capital of Montenegro when boarding a flight to Dubai.

Authorities found forged Costa Rican passports on them together with Belgian passports, laptops, etc. Do Kwon and his former colleague were then placed in a 30-day pre-trial detention.

In one of the court hearings, Do Kwon dropped the request to check the authenticity of the Costa Rican passports. Interestingly, Interpol had already confirmed it to be fake. 

The U.S. District Court in Manhattan has already announced an eight-count indictment against him for securities fraud, wire fraud, commodities fraud, and conspiracy. In South Korea, he faces charges of “financial crimes including fraud, violations of capital-markets laws, manipulating transaction volumes using “trader bots” and bribery.”

Both Kwon and Han have been requested by the South Korean and U.S. authorities to be extradited to face related charges. On top of that, all seized computers have been requested to be handed over. 

Former CEO of Terraform Labs to be Extradited to the US?

In the latest report, a source familiar with the case disclosed that Montenegro’s Justice Minister, Andrej Milovic, is planning to send Do Kwon to the US instead of South Korea. Meanwhile, the head of the South Korean investigative team Dan Sung-han recently told the Wall Street Journal that investigating the case in the country could be the most efficient way of bringing Justice to investors.

He believes that the former Terraform Labs CEO could face the longest jail term for financial crime in the Country’s history. 

Currently, Do Kwon has been sentenced to four months in prison for document forgery in Montenegro. It is also important to note that the extradition request has been approved by the court, but a decision on where he would be extradited has not yet been made. It is also stated that the Minister of Justice would make the final decision on which country has priority. 

In the US Securities and Exchange Commission (SEC) lawsuit against Do Kwon, it was stated that he made billions of dollars from investors through the sales of crypto asset securities with many flagged as unregistered transactions. 

These included “mAssets,” security-based swaps designed to pay returns by mirroring the price of stocks of US companies, and Terra USD (UST), a crypto asset security referred to as an “algorithmic stablecoin” that supposedly maintained its peg to the U.S. dollar by being interchangeable for another of the defendants’ crypto asset securities, LUNA. The complaint further alleges that Terraform and Kwon offered and sold investors other means to invest in their crypto empire, including the crypto asset security tokens MIR—or “mirror” tokens—and LUNA itself.

His lawyers have already filed the motion to dismiss this lawsuit, claiming TUSD is not a security, but a currency. 

The crypto market is currently recovering from the impact suffered from the TerraUSD collapse as Bitcoin (BTC) made an incredible run to trade at $43,230.70. In the last 24 hours, the asset has fallen by 1.62%. 

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Filed under: Bitcoin - @ December 8, 2023 11:16 am