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Do Kwon’s Extradition Delayed; U.S. and South Korea Await Custody

2023.12.21

 

Key Takeaways

  • Do Kwon to remain in Montenegrin custody until February, pending extradition to the U.S. or South Korea.
  • Kwon faces criminal charges in both countries related to Terraform Labs’ collapse and crypto market downturn.

Extended Custody in Montenegro

Do Kwon, co-founder of Terraform Labs, will continue his stay in Montenegrin custody until February 2023. This development followed a joint request from the U.S. and South Korea, both seeking Kwon’s extradition to face criminal charges linked to Terraform Labs’ implosion. Kwon was initially arrested in March for using false travel documents, leading to a four-month prison term in Montenegro.

International Legal Tussle

The ongoing legal saga sees the U.S. and South Korea in a tug-of-war over Kwon’s extradition. While South Korea initially issued an arrest warrant, recent reports indicated that the U.S. might be the first to take custody. Kwon, a pivotal figure in the Terra debacle, was charged with multiple counts of fraud and market manipulation in both jurisdictions.

Charges and Implications

If extradited to the U.S., Kwon will face a slew of charges, including securities fraud, commodities fraud, and conspiracy. The U.S. Securities and Exchange Commission (SEC) has also accused him of deceiving investors in cryptocurrency operations. This legal battle underscores the growing scrutiny and regulatory actions in the cryptocurrency market, especially post the Terra collapse.

Terra’s Collapse and Crypto Market Impact

The fall of Terra in May 2022, marked by the depegging of TerraUSD (UST), is seen as a catalyst for a broader crypto market downturn. The aftermath saw several crypto firms, including Voyager Digital, BlockFi, Celsius Network, and FTX, filing for bankruptcy, highlighting the systemic vulnerabilities within the crypto ecosystem.

 


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