SEOUL — South Korean authorities are actively pursuing the extradition of Do Kwon, the co-founder and former CEO of Terraform Labs, in connection with the devastating collapses of TerraUSD (USTC) and LUNA tokens.
The Wall Street Journal has reported that the lead prosecutor overseeing the investigation believes that bringing Kwon back to South Korea would be the most beneficial course of action for the victims affected by the collapse.
Dan Sung-han, the head of South Korean prosecutors investigating the crash of the two cryptocurrencies, has stated that a majority of the alleged crimes committed by Kwon took place within South Korea. These crimes resulted in losses of almost $40 billion for the Terra ecosystem.
In an interview with the newspaper, the prosecutor emphasized that due to the nature of the incident, conducting the investigation within South Korea would be the most effective means of ensuring justice for the investors affected by the collapse.
Kwon, who is also a South Korean citizen, was arrested in Montenegro in March on charges of document forgery.
Since then, both U.S. and South Korean authorities have been working diligently to secure his extradition. Additionally, regulatory bodies in Singapore have expressed their interest in obtaining Kwon’s presence for questioning.
Following Kwon’s arrest, Montenegrin Justice Minister Marko Kovač stated that the decision regarding his extradition would be based on several factors, including the severity of the offense, as well as the location and time of the crimes committed.
Montenegro lacks an extradition treaty with both Singapore and South Korea. However, the country does have an older extradition agreement with the United States and has previously extradited American citizens.
In late April, South Korean officials indicted Shin Hyun-seong, another co-founder of Terraform Labs, alongside nine other individuals, on charges of fraud, breach of trust, and embezzlement related to the collapse of the Terra ecosystem.
According to the Korean daily KBS World, prosecutors alleged that the accused individuals illicitly earned profits amounting to nearly 460 billion Korean won ($350 million).
Should Kwon be extradited to South Korea, he would likely face similar charges, carrying a maximum prison sentence of 40 years, as informed by Sung-han to the Journal.
Terra, one of the pioneering crypto companies that popularized algorithmic stablecoins, faced a catastrophic downfall when its native stablecoin, USTC, detached itself from the U.S. dollar in May 2022.
This event triggered a chain reaction crisis within the cryptocurrency industry throughout the previous year.