South Korea Seeks Extradition of Terraform Labs Co-Founder Mr. Kwon

The Police Agency has sought Interpol's help in extraditing Kwon Do-hyeong, co-founder of Terraform Labs, to South Korea.

Hassan Shittu Last updated: March 7, 2024 10:40 EST | 3 min read South Korea’s National Police Agency has officially requested assistance from the International Criminal Police Organization (Interpol) in bringing back Kwon Do-hyeong, the co-founder of Terraform Labs, to South Korea, according to a local news agency on March 7.

After Terra co-founder Do Kwon won an extradition appeal in a Montenegro court denying his extradition to the United States, South Korea has started preparing for his extradition.

South Korea asks Interpol to help extradite Terraform Labs Co-Founder.

On March 7, South Korea’s National Police Agency announced that it had reached out to the Interpol Secretariat to request the extradition of Mr. Kwon to Korea. The agency said it had requested the Interpol Secretariat in the name of the Interpol National Central Secretariat of the Republic of Korea, hoping to get support at the Secretariat level.

However, the agency has yet to receive a response from Interpol. Additionally, South Korea’s Ministry of Justice is also reportedly seeking assistance from Interpol, as per local news agency Newsis. Lee Yong-sang, an international cooperation officer, mentioned that the Ministry of Justice’s International Criminal Division and the National Police Agency are actively engaged in the process of repatriating Mr. Kwon through international channels, including Interpol.

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Officer Lee Yong-sang said:

“The Ministry of Justice’s International Criminal Division and the National Police Agency are working together to repatriate Mr. Kwon through the International Criminal Cooperation Channel and Interpol’s International Cooperation Line, respectively.”

Understandably, Terra’s token LUNA is not a security in South Korea, as the Southern District Court in Seoul ruled that these tokens are not securities under the Capital Markets Act. However, a judge in the U.S. SEC vs. Terraform Labs and Do Kwon lawsuit ruled that LUNA is a security. This ruling has implications for the severity of punishment and imprisonment terms as the U.S. seeks his extradition for fraud charges.

Earlier this month, a Montenegro court overturned Kwon’s extradition order to the U.S., which the Podgorica High Court initially granted following an appeal by his defense attorneys. They argued that the initial decision was based on misinformation regarding the timing of extradition requests from the U.S. and South Korea.

The appeals court’s decision stated that Korea’s extradition request, dated March 29 last year, preceded the U.S. request on April 3, affirming Korea’s priority in seeking extradition.

Terraform Labs Co-Founder Faces Fraud Charges

The police spokesperson mentioned that the reconsideration of Kwon’s extradition provided an opportunity for South Korea to request assistance once again. Given Interpol’s cooperative relationship with its entity in Montenegro, the Korean authorities reiterated that South Korea’s extradition request preceded that of the U.S.

With the possibility of Mr. Kwon returning to Korea emerging following the retrial by the High Court, the Korean government is determined to pursue all available avenues to secure his repatriation. The Ministry of Justice, Ministry of Foreign Affairs, and National Police Agency are coordinating efforts to facilitate Mr. Kwon’s return.

Kwon, the former leader of Terraform Labs, faces fraud charges from both U.S. and South Korean authorities in connection with the collapse of the Terra ecosystem in May 2022, resulting in significant losses for investors.

The ‘Terra Luna Incident’ refers to the sharp decline in the prices of Terra and Luna cryptocurrencies caused by the collapse of their peg with the U.S. dollar. The incident resulted in significant losses for investors worldwide, estimated at over 50 trillion won, with 200,000 victims in South Korea alone.

Mr. Kwon fled to Singapore in April 2022 before the cryptocurrency crash and was subsequently arrested in Montenegro in March last year for using a fake passport while abroad. He has been detained locally for a year since then. He was sentenced to four months in November.

Throughout the legal proceedings, Kwon has consistently denied the allegations of deliberate fraud against him and Terraform Labs.

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Additional Q&A:

Q: What is Terraform Labs?

A: Terraform Labs is a company that focuses on blockchain technology and the development of decentralized applications. They are known for creating the Terra cryptocurrency and ecosystem.

Q: What is the significance of South Korea seeking extradition?

A: South Korea seeking extradition of Mr. Kwon indicates their determination to hold him accountable for the collapse of the Terra ecosystem and the financial losses suffered by investors. It also highlights the international cooperation and efforts being made to bring him back to face fraud charges.

Q: What are the implications of LUNA being considered a security in the U.S.?

A: If LUNA is considered a security in the U.S., it could have serious legal consequences for Mr. Kwon as he faces extradition for fraud charges. The classification of LUNA as a security may result in harsher punishment and imprisonment terms if he is extradited to the U.S.

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References:

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