South Korea Seeks Extradition of Terra Founder Do Kwon from Montenegro for Multi-Billion Dollar Collapse

South Korean authorities are seeking the extradition of Do Kwon, founder of Terra (LUNA), from Montenegro, where he has been held since March, after he was accused of making false claims about the digital assets he launched as part of the Terra ecosystem. Kwon is also accused of creating trading bots to falsely boost the transaction numbers of TerraUSD, the ecosystem's failed algorithmic stablecoin. Lead prosecutor Dan Sung-han said that bringing Kwon back to South Korea would be the best way to obtain justice for the victims of last year's multi-billion-dollar collapse of the Terra ecosystem. According to Dan, investigating the case in South Korea would be the most efficient way of bringing justice, even though some of Kwon's fraudulent actions took place in the United States. If convicted, Kwon could face over 40 years in prison, the largest sentence ever handed out for financial crimes in South Korea.

Kwon was arrested in Montenegro after attempting to board a flight to the United Arab Emirates with a forged Costa Rican passport. The Terra ecosystem's troubles began in May 2020 after both its native assets, LUNA and TerraUSD, collapsed, leading to about $40 billion in losses. Kwon is also facing charges from the US Securities and Exchange Commission (SEC) for allegedly violating securities laws. Last month, he asked a court to dismiss these charges.

South Korea is in talks with US prosecutors to extradite Kwon, with Dan Sung-han stating that much of the fraudulent activity occurred in South Korea. If the extradition request is granted, Kwon could face the largest sentence ever handed out for financial crimes in the country.