Do Kwon extradited from Montenegro to face allegations tied to $40 billion cryptocurrency collapse
Do Hyeong Kwon, the 33-year-old South Korean co-founder of Terraform Labs, appeared in a New York court on Thursday following his extradition from Montenegro. Kwon, who is accused of masterminding one of the largest collapses in cryptocurrency history, faces charges of commodities fraud, securities fraud, wire fraud, and money laundering.
The charges stem from the catastrophic implosion of Terraform Labs’ cryptocurrencies in May 2022, which wiped out over $40 billion in investor assets and caused financial devastation across the globe. Kwon, the former CEO of Terraform Labs, allegedly deceived investors to inflate the value of the company’s digital currencies, according to US prosecutors.
“Do Hyeong Kwon will now be held accountable in an American courtroom for … his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses,” US Attorney-General Merrick Garland said in a statement.
US Attorney Daniel Gitner highlighted the far-reaching impact of the collapse, stating, “The May 2022 crash of Terraform’s cryptocurrencies erased over $40 billion in investor assets, causing devastating losses to countless investors in the United States and around the world.”
Kwon’s legal troubles extend beyond the United States. He is also wanted in South Korea, his home country, for his role in the downfall of Terraform Labs. If convicted of all charges in the United States, Kwon could face a maximum sentence of 130 years in prison.
Arrested After Months on the Run
Kwon was apprehended in March 2023 at Podgorica Airport, the capital of Montenegro, while attempting to board a flight to Dubai. Authorities discovered he was carrying a counterfeit Costa Rican passport at the time of his arrest.
Before his capture in the Balkan nation, Kwon had evaded law enforcement for months. He fled South Korea after Terraform’s collapse and was reportedly residing in Singapore before embarking on his global flight from justice.
Kwon’s extradition to the United States marks a significant milestone in efforts to hold him accountable for the financial disaster linked to Terraform Labs. Legal analysts suggest the case could serve as a landmark in prosecuting cryptocurrency-related fraud, a space that has often operated in regulatory gray areas.
The case against Kwon highlights the increasing scrutiny on the cryptocurrency industry as global regulators seek to prevent similar collapses from wreaking havoc on financial markets and investors.
