Crime & Justice

Seoul to seek Terraform Labs co-founder Do Kwon’s extradition

Seoul, Mar 24 (EFE).- South Korea’s prosecutors said Friday that they will seek the extradition of Do Kwon, a co-founder of Singapore-based Terraform Labs, who was arrested the previous day in Montenegro in connection with a $40 billion crash of the firm’s cryptocurrency.

The Seoul Southern District Prosecutors Office will begin processing a request to Montenegro to transfer Kwon, local news agency Yonhap reported.

It is not clear if the entrepreneur will be sent to South Korea, since he also faces charges in the United States and Singapore.

“Montenegrin police detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs,” Montenegro Interior Minister Filip Adzic tweeted late Thursday.

Kwon was arrested at the Podgorica airport carrying falsified documents, the minister said, adding that he was still waiting for an official confirmation of his identity.

Kwon, who had been a fugitive for several months and had last been seen in Serbia in December, was arrested along with one of his close aides, surnamed Han, according to Yonhap.

Last month, the United States Securities and Exchange Commission (SEC) charged Terraform and Kwon with “orchestrating a multi-billion dollar crypto asset securities fraud.”

“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,” SEC said, adding that the company and its CEO “marketed crypto asset securities to investors seeking to earn a profit, repeatedly claiming that the tokens would increase in value.”

In May 2022, two of the currencies backed by Terraform Labs, TerraUSD and Luna, crashed dramatically.

TerraUSD was a stablecoin that was pegged to the dollar through a complex algorithm linked to Luna, an unbacked cryptocurrency.

In about five days, TerraUSD lost practically all its value, causing losses of around $40 billion and even affecting the price of the main cryptocurrency, Bitcoin, according to the indictment.

South Korean prosecutors, who accuse Kwon of running a Ponzi scheme, had already issued an arrest warrant for the crypto founder.

Interpol had also issued a red corner notice for his arrest. EFE


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