Do Kwon, the crypto tycoon behind the 2022 collapse of TerraUSD and Luna, caused an estimated US$40 billion in investor losses. He could face another trial and prison sentence in South Korea if authorities extradite him.
The 34-year-old Korean national is expected to apply to the International Prisoner Transfer Programme after serving half of his 15-year US sentence.
American prosecutors have agreed not to oppose the request as part of a plea deal. This keeps the possibility of his transfer to Korea open.
Following his arrest in Montenegro in March 2023, Kwon sought legal action to be extradited to Korea rather than the US, the Korea Times reported.
Authorities eventually transferred him to the US on 31 December 2024. He received his sentence last Thursday.
If Kwon returns to Korea, he could face a separate trial on charges including violations of the Capital Markets Act. He could receive penalties independent of the US proceedings.
The Seoul Southern District Prosecutors’ Office’s joint financial crimes unit issued an arrest warrant for him in September 2022.
“A guilty verdict in Korea could result in a sentence exceeding 30 years,”
a senior prosecutor said, noting that prosecuting Kwon domestically would best serve efforts to compensate local victims.
Authorities estimate around 200,000 victims in Korea, with total losses of approximately 300 billion won.
Ten alleged accomplices have been on trial in Korea for nearly three years.
Kwon, whose full name is Kwon Do-hyung, co-founded Singapore-based Terraform Labs, the firm behind TerraUSD and Luna.
Terraform Labs designed the Terra protocol to maintain a one-to-one peg with the US dollar. However, it collapsed in May 2021.
Despite claims the protocol had restored its value, US prosecutors found Terraform Labs had secretly purchased Terra to prop up its price.
District Judge Paul A. Engelmayer sentenced Kwon to 15 years in prison after convicting him on nine counts, including fraud and money laundering. The judge described the scheme as “a fraud on an epic, generational scale.”
He also ordered Kwon to forfeit US$19 million in illicit gains.
Featured image credit: Edited by Fintech News Hong Kong, based on image by fabrikasimf via Freepik
