As a federal judge in the U.S. prepares to sentence Terraform Labs co-founder Do Kwon on Thursday after he pleaded guilty to two felony charges, the judge is inquiring about Kwon's legal troubles in his home country of South Korea and Montenegro.
In documents submitted to the U.S. District Court for the Southern District of New York on Monday, Judge Paul Engelmayer asked Kwon's lawyers and prosecutors representing the U.S. government about the charges he faces in South Korea, as well as the "maximum and minimum penalties" Kwon could face there. After potentially serving time in the U.S., Kwon is expected to be extradited to South Korea.
Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to commit fraud, and he is set to be sentenced by Engelmayer on Thursday.
In addition to asking whether Kwon might serve time in South Korea, the judge also inquired whether there was agreement that "the time Mr. Kwon has been detained in Montenegro"—where he served four months for using forged travel documents and fought extradition to the U.S. for over a year—would not count towards any potential sentence he faces in the U.S.
Judge Engelmayer's questions reflect a concern: if the U.S. approves Kwon's extradition to South Korea to serve "the latter half of his sentence," he might be released early by South Korean authorities.
Before the collapse of the Terra ecosystem in 2022, Kwon was one of the most prominent figures in the cryptocurrency and blockchain industry. Many experts believe that the collapse of Terra contributed to the market crash that year, leading to the bankruptcy of multiple companies and significant losses for investors.
Kwon's defense attorneys are requesting that his sentence in the U.S. not exceed five years, while prosecutors are advocating for at least twelve years.
The U.S. government's sentencing recommendation states that Kwon "caused losses exceeding" those caused by former FTX CEO Sam Bankman-Fried, former Celsius CEO Alex Mashinsky, and OneCoin's Karl Sebastian Greenwood combined. All three are currently serving lengthy sentences in federal prison.
Kwon's lawyers argue that even if Judge Engelmayer sentences Kwon "based on time served," he will "immediately re-enter pre-trial detention for pending criminal charges in South Korea," where he could face up to 40 years in prison due to his citizenship.
Thursday's sentencing hearing may mark the beginning of the end of Kwon's chapter related to the 2022 Terra collapse. During the downturn in the crypto market, his whereabouts were once unknown to the public until he was arrested and detained in Montenegro, awaiting extradition to the U.S. U.S. prosecutors charged him in March 2023 regarding his role in Terraform.
South Korean authorities issued an arrest warrant for Kwon in 2022 but have been unable to detain him since the collapse of the Terra ecosystem. The country's prosecutors have simultaneously sought Kwon's extradition from Montenegro while filing similar cases against individuals associated with Terraform.
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Original article: “U.S. Judge Seeks Clarification on Do Kwon's Overseas Charges”
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