Prosecutors expected the businessman to appear in a US court on fraud charges as early as March 25

US authorities to challenge extradition of Terra founder from Montenegro to South Korea

08.03.2024 - 09:59

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3 min

What’s new? The US Department of Justice intends to challenge the decision of the Podgorica High Court to extradite Terra blockchain founder Do Kwon to South Korea, of which he is a citizen. Kwon was detained in Montenegro last March and served a sentence there for passport forgery, after which the country’s authorities decided to extradite him to the United States. However, an appeals court then rejected the decision, and the case was sent for review, following which the businessman was extradited to the Korean authorities. The authorities of both countries charged him with fraud in connection with the collapse of Terra, which brought investors multi-billion dollar losses.

Material by Bloomberg

What else is known? The Justice Department specified that the US continues to seek Kwon’s extradition under international and bilateral agreements, as well as the legislation of Montenegro.

In addition, the US authorities expected that in March Kwon would already be brought to the country, which would allow the start of the fraud trial. Thus, in January, the date of the hearing was postponed to March 25.

At the same time, the businessman’s lawyers insisted on his extradition to Korea. The Korean Ministry of Justice specified that they had not yet received an official notification from the authorities of Montenegro. The extradition procedure will begin after the necessary documents are finalized.

Industry experts note that Kwon will receive a much more lenient sentence in his home country compared to the United States, or will be acquitted altogether. Thus, in a conversation with Bloomberg, Terrence Yang, a managing director at Swan Bitcoin and former counsel at Merrill Lynch, called the decision of the Montenegrin court “a travesty” because the US is home to a much larger number of affected investors with the largest share in the total amount of damage from the collapse of Terra for $40 billion.

Leader of the leading party in Montenegro accused of having ties with Do Kwon

Leader of the leading party in Montenegro accused of having ties with Do Kwon

The alleged connection is reported in a handwritten document by the founder of TFL

Read more

Meanwhile, already after Korean authorities charged Kwon with fraud, the country increased penalties for fraud, market manipulation, and insider trading in digital assets. Offenders can now receive life imprisonment if the amount of damage exceeds 5 billion Korean won.

On March 28, the sentencing of FTX crypto exchange founder Sam Bankman-Fried will be announced in the United States. The jury unanimously found him guilty of stealing $8 billion in customer funds. The maximum penalty for the businessman could be imprisonment for 110 years, but his lawyer asked to reduce the term to 6,5 years. He argued that the clients would receive compensation as part of the company’s bankruptcy proceedings.

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