Do Kwon is expected to stand trial in Montenegro before facing charges in other interested jurisdictions. Kwon is the founder and CEO of Terraform Labs, the crypto company that created TerraUSD and LUNA. TerraUSD was an aspiring algorithmic stablecoin pegged to the US dollar. The stablecoin failed, taking down multiple crypto firms with it, and raising questions about the entire crypto industry. Kwon was recently arrested in Montenegro, where it was reported that he was attempting to travel to Dubai with a forged passport – said to be Belgian.
Both the United States and South Korea have submitted requests for his extradition. According to reports, South Korea was the first government to request Kwon’s return filing necessary documents last Friday.
Chosun reports that Kwon was detained with three laptops as well as five mobile phones with interesting information.
The South Koreans have launched an investigation targeting Kwon for allegations of tax evasion, fraud and running a Ponzi scam.
The US Securities and Exchange Commission filed charges against Kwon in February as part of a broader crypto crackdown in the US. The SEC’s complaint alleges that from April 2018 until the scheme’s collapse in May 2022, Terraform and Kwon raised billions of dollars from investors by offering and “selling an inter-connected suite of crypto asset securities, many in unregistered transactions.”
On another front, Yonhap reports that an arrest warrant for Daniel Shin, a co-founder of Terraform Labs, has been denied.
According to the report, the Seoul Southern District Court is of the opinion there are questions regarding allegations against Shin and that he is unlikely to flee the country. Yonhap states that prosecutors believe Shin pilfered “illegal profits” worth around $107 million by dumping LUNA at peak market. Shin asserts that he has no culpability in the collapse of Terraform, TerraUSD/LUNA as he exited the company in March 2020.