After South Korean cryptocurrency entrepreneur Do Kwon was extradited to the United States, he appeared before a federal judge in New York on Thursday. The judge opened proceedings against the 33-year-old for fraud and money laundering.
Kwon had been on the run from American and South Korean authorities for almost a year. If found guilty on all nine counts, he could be sentenced to up to 130 years in prison.
Kwon must answer for fraudulently misleading investors about the true value of his cryptocurrency company Terraform Labs, U.S. Attorney General Merrick Garland said. Accordingly, Kwon had earned investors a total of more than 40 billion dollars (38.8 billion euros). The cryptocurrency Terra collapsed in May 2022.
Business partner extradited to South Korea
Kwon is also being investigated for fraud in his home country. His business partner, whose initials were only JCH, was extradited from Montenegro to South Korea in early February 2024.
Kwon was the boss and co-founder of Singapore-based startup Terraform Labs, which released the cryptocurrencies TerraUSD and its sister currency Luna. The entrepreneur issued the two coins as so-called stablecoins, which are linked to traditional currencies such as the US dollar to prevent sharp fluctuations in value. In reality, Kwon did not hedge his cryptocurrencies with safe investments such as government bonds.
Both imploded in May 2022, Terraform Labs went bankrupt and Kwon subsequently went bankrupt. South Korea then called Interpol to have Kwon put on a global wanted list in 195 Interpol member states.
Pleitier was arrested in Montenegro
Kwon fled from South Korea to Montenegro via Singapore. He was arrested there in March 2023 at the airport of the capital Podgorica when he wanted to fly to Dubai with a fake Costa Rican passport. When he was arrested, Kwon was one of the world’s most wanted suspected white-collar criminals.
Source: Krone
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