Terra News
Do Kwon’s Extradition Cause Still Unresolved
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More than a week since his arrest in a foreign country, Terraform Labs cofounder Do Kwon remains in the headlines.
Kwon, who on numerous occasions denied being on the run, was arrested on Mar 23 by local police at the Podgorica airport in Montenegro. The disgraced crypto entrepreneur was detained alongside former Terraform Labs' Chief Financial Officer Hon Chang Joon while preparing to take a flight to Dubai. Found in Kwon's possession were a Belgian identification and a forged Costa Rican passport, according to a Bloomberg report. Kwon was said to have been traveling alongside a fellow business associate from Costa Rica. Subsequent reports have since indicated that the South Korean native might spend time in jail in the Balkan country.
Criminal charges could be brought for falsified travel documents
Interpol confirmed last week's reports suggesting that Kwon had been arrested at an airport with falsified documents. The international crime control organization said a fingerprint match corroborated his identity. Montenegro’s Ministry of Justice Marko Kovac said in a latter statement this Wednesday that the United States and South Korean governments requested to extradite the Terra co-founder so he can face charges against him. In Montenegro, where he remains held, Kwon has been charged with forging official travel documents. Pobjeda, a local news outlet in Montenegro, stated that the Basic State Prosecution Office was considering pressing criminal charges against Do Kwon for falsifying travel documents.
Kovac implied that extradition would only be considered after the conclusion of a trial on the same – the charges carry up to a maximum of three years in jail. Kwon's legal representation in the country denied the allegations leveled against his client, adding that Kwon is willing to challenge the claims in court. A court in Podgorica ordered the pair to be held for 30 days awaiting trial for traveling on forged travel documents. Last month, the US Securities and Exchange Commission (SEC) alleged that Kwon was evading authorities after exiting with 10,000 Bitcoin. The agency also claimed that he withdrew $100 million of the loot in its filed civil charges against him – specifically, for misleading investors.
Charges in the US
A few hours after it was first reported that Do Kwon had been located, state regulators in New York took to the court to charge the risk enthusiast. United States Attorney Damian Williams filed to bring Kwon to face the law on eight counts, including wire fraud, securities fraud, commodities fraud, and knowingly engaging in market manipulation. According to the filing, Kwon purportedly disseminated numerous material misstatements (deemed untrue and misleading) through various media channels, including Terraform Labs-associated Twitter accounts and television appearances, over an extended period.
The filing also alleged that Kwon reached out to representatives from a trading and investment firm based in the United States to request assistance in manipulating the market price of UST. The SEC had also made reference to this firm, and Jump Trading is said to be this entity that made nearly $1.3 billion in profit from supporting the UST stablecoin.
More charges outside the US
Singapore authorities, too, launched an inquiry into Terraform Labs earlier this month. Meanwhile, in South Korea, Kwon has been a wanted person since last September, when a warrant was issued for his arrest on charges including fraud. The embattled executive of the firm behind the Terra ecosystem (underpinned by the now-infamous algorithmic UST stablecoin) is also being pursued for violating capital markets laws.
Kwon isn’t the only Terraform Labs employee who may face the wrath of the law regarding the fall of the Terra ecosystem. Fellow cofounder Shin Hyun-Seung appeared before the Seoul Southern District Court on March 30 to respond to inquiries regarding Terra’s downfall. The court also dismissed a second arrest warrant request for Shin after ruling that he didn’t pose any flight risk and couldn’t impede the ongoing investigation. Though Shin acknowledged being a cofounder of the firm in 2018, he clarified that he left the firm in 2020, predating the events surrounding the May 2022 collapse.
