US vs. South Korea: Which Country Will Extradite Terra Founder?

South Korea and the US appear to be competing over the extradition of disgraced Terra founder Do Kwon, and his business associate Hon Chang-Joon is caught in the crossfire.

The extradition requests have been officially made, Reuters reported, about one week after their arrests. But it isn’t yet determined to which country he would eventually be extradited. 

Montenegro’s justice minister Marko Kovac has said South Korea is seeking the extradition of both individuals, while the US is only after Kwon, according to ABC News.

Both Kwon and Joon were arrested at Montenegro’s Podgorica airport last Friday for allegedly entering the country illegally and forging official documents. Authorities have said they were using fake Costa Rican passports in attempting to fly to Dubai.

The two were also carrying a set of Belgian passports, laptop computers and other devices in their baggage, per police. Both South Korea and the US are also expecting the computers to be handed over. 

Shortly after arresting the Terra founder, prosecutors in New York charged Kwon with securities fraud, wire fraud and commodities fraud.

It could take time for South Korea and the US to see their requests fulfilled. Kovac said both men are currently being investigated for possession of false documents, for which they could face criminal proceedings. 

A potential sentence could carry up to five years prison time, and both individuals could only be extradited after a court ruling. Kwon told officials in Montenegro that he was used to “VIP treatment” when they were anywhere else in the world, Bloomberg reported.

Terra crash triggered bankruptcies and billions in losses

Following the collapse of Kwon’s algorithmic stablecoin last May, South Korea officially issued an arrest warrant for Kwon in September, along with five other employees at the software startup behind the project, Terraform Labs. 

That same month, Interpol issued a global request to arrest Kwon, essentially asking its 195 member countries to apprehend the fugitive.

Terra’s demise is estimated to have wiped $20.5 billion in nominal value from personal crypto wallets, according to Chainalysis. The dramatic event kickstarted a wave of liquidations, bankruptcies and tumbling crypto markets.

And even though Kwon publicly maintained that he was not “on the run” the whole time, reports indicated he continually moved around Europe and Asia, including through Singapore and Serbia. 

South Korean officials announced in November that the fugitive’s passport was made invalid, after which Kwon tweeted he would organize a meetup or a conference, with international authorities invited.

Kwon was aware of losing his passport, earlier indicating in an interview with journalist Laura Shin that he was indifferent about it becoming void.

“I’m not using it anyway. I can’t see how that makes a difference,” he said at the time, without clarifying whether he held another passport.

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