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Terra’s Do Kwon Might Be Handed Maximum Prison Sentence; Here’s Why

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Terra’s Do Kwon may face multiple prison times both in South Korea and the US, a senior South Korean prosecutor who is leading the investigation told Bloomsberg.

According to Dan Sunghan, before prosecution, a convict is subject to multiple cross-border sentences for some of the crimes in one of the jurisdictions.

The Terra founder may be extradited to the US for trial after serving his term in South Korea, which could be over 40 years if South Korean officials do not account for all of his accusations there, Sunghan explained.

It is important to note that the South Korean and American governments both asked for his extradition to their respective nations, and such a request can take up to nine months to process, according to the prosecutor.

Additionally, the crypto entrepreneur’s extradition to South Korea made more sense “when it comes to bringing justice or recovering the damages for victims,” as local authorities have access to more evidence when compared to their American counterparts.

Kwon might also be given “the longest sentence ever handed down in South Korea,” the prosecutor claimed. “This is the largest financial fraud or financial securities fraud case that has ever happened in South Korea,” Sunghan added.

The infamous crypto tycoon and his associate Han Chang Joon were granted bail by the Montenegro court for $436,000 each along with being put under house arrest.

As per the official notice published by local authorities on May 12, the court had set the bail at EUR 400k for each of the defendants and ordered that they be released upon payment of this amount. 

Montenegro authorities arrested the elusive co-founder after he was caught using fake travel documents. The bail came after Kwon’s attorneys had submitted their request for such terms to the Montenegrin authorities.

Terra Co Accused Made His First Court Appearance

Meanwhile, Daniel Shin, Kwon’s long-time business partner and one of the founders of the doomed crypto project appeared in court at the Seoul Southern District Court for his first trial on May 26.

Shin, a co-accused in the stablecoin project failure was recently indicted by South Korea on violations of capital-markets law among other charges.

He and nine other staff members of Terraform Labs face multiple charges, for illegal trading; two others are accused of breach of trust.

Terra Kingpin Do Kwon Granted Bail By Montenegro Court

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The former CEO of the Terra blockchain Do Kwon and his associate Han Chang Joon were granted bail by the Montenegro court for $436,000 each along with being put under house arrest.

As per the official notice published by local authorities on May 12, the court has accepted the offered bail of EUR 400k each for the defendants and ordered that they be released upon payment of this amount. 

“If the defendants escape or violate the supervision measure, the bail is forfeited and entered into a special section of the budget for the work of the courts,” the court warned.

As stated in the bail document, they also promised that if bail is set, they will not hide until the end of the criminal proceedings, that they will regularly respond to court summons, and that they will be available at the address provided by their defense attorney.

Following his arrest by Montenegro authorities due to using fake travel documents, the Terra founder pleaded not guilty at the Basic Court in Podgorica, according to a Bloomberg report.

The bail came after Kwon’s attorneys had submitted their request for such terms to the Montenegrin authorities.

A year ago, the collapse of TerraUSD [UST], the stablecoin created by Terraform Labs became one of the crypto industry’s worst debacle as it wiped out tens of billions of dollars for investors. 

Since then, Kwon and his staff have been slapped with lawsuits in Korea, Singapore, and the U.S. stemming from TerraUSD’s collapse. 

Meanwhile, Daniel Shin, Kwon’s long-time business partner and Terra co-founder is set to make a formal court appearance at the Seoul Southern District Court for his first trial on May 26, TronWeekly reported the other day.

Terra’s Do Kwon Assets Seized After This

Shin, a co-accused in the stablecoin project failure was recently indicted by South Korea on violations of capital-markets law among other charges.

He and nine other staff members of Terraform Labs face multiple charges, for illegal trading; two others are accused of breach of trust.

In addition to that, a Seoul Court gave the green signal to seize $176 million in assets owned by Do Kwon after local reports emerged that the disgraced founder had allegedly concealed $100 million in a Swiss bank account.

Terraform Labs Co-Founder Do Kwon Pleads Not Guilty In Montenegro Forged Documents Case

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Terraform Labs Co-Founder Do Kwon, arrested in Montenegro based on an international warrant and accused by local authorities of using fake travel documents, pleaded not guilty during his court appearance, according to a Bloomberg report.

Do Kwon, the founder of Terra, who had been evading authorities for some time, was recently apprehended by Montenegro officials. The government of Montenegro has accused him of forging local documents and is presently awaiting extradition. Despite the crypto community’s contemplation on the collapse of Terra, which occurred a year ago, Kwon refuted certain allegations against him.

Recent reports suggest that Do Kwon pleaded not guilty at the Basic Court in Podgorica, Montenegro. Kwon and Han Chang-Joon, the former CFO of Terra, was detained based on an international warrant and found to possess a South Korean passport and counterfeit Belgian and Costa Rican travel documents. Since the duo’s possession of forged Belgian and Costa Rican passports was discovered, they have been charged with the offense.

It is important to note that using forged documents is a criminal offense in the region. Individuals found guilty of this can face imprisonment of up to five years. Branko Andjelic, the Terra duo’s defense lawyer, proposed releasing them on bail of 400,000 euros, or $437,240 each. However, prosecutor Haris Sabotic rejected this suggestion, claiming they have adequate financial means but no intention of remaining in Montenegro.

Although Do Kwon and Han Chang-Joon assert the validity of their Costa Rican passports, only time will determine the authenticity of their claim. The subsequent court hearing for the lawsuit has been set for June 16.

Terra Co-Founder Do Kwon To Stand Trial In South Korea

Daniel Shin, the co-founder of Terra, has been charged with multiple offenses related to the network’s downfall. He and seven other individuals have been accused of fraud, embezzlement, and breach of duty. The Seoul Southern District Court of South Korea has scheduled the first trial on May 26 to address these allegations. It’s worth mentioning that South Korea is also preparing for the extradition of Do Kwon.

Related Reading: | Terra’s Do Kwon Challenges US Extradition: Report |

Source: Tradingview.com

Terra’s Do Kwon Challenges US Extradition: Report

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While on the run, Do-hyung Kwon, co-founder of Terraform Labs, reportedly disputed US jurisdiction. This comes amidst South Korean and American law enforcement agencies competing to find recruits for the wanted crypto billionaire who was recently apprehended in Montenegro.

According to a report by YNA, Kwon, a key figure in the Terra Luna debacle asked the U.S. Supreme Court to extend the deadline for submitting an appeal request.

The move, as per the article, was done with the intention of disobeying the summons order issued by the US Securities and Exchange Commission [SEC] on August 18 to October 6 last year.

In the documents submitted to the Supreme Court, Kwon’s lawyer argued, “Although Terraform is a Singapore corporation and Kwon is also a resident of Singapore, the SEC [a US institution]’s personal jurisdiction was recognized by the 2nd Court of Appeal.”

Kwon is the CEO of Terraform, an open-source software development company with limited contact with the United States. Most of this company’s business is essentially global, and it is not specifically aimed at the United States.

“Looking at the digital market as well as in a general context, the judgment of this court’s personal jurisdiction is broad and important,” Kwon’s side emphasized.

Terra Founder Attempts To Buy Out More Time

Also, it asked for a delay, stating that the attorneys’ team is under a great deal of pressure to apply for permission to appeal by the deadline of September 6.

It is not yet known whether the Supreme Court actually granted the request for a postponement or whether the Terra founder actually appealed.

According to some analysts, the disgraced CEO may be buying time to lessen the severity of his sentence in the future.

While the maximum term in South Korea is just about 40 years, in the United States, it can reach over 100 years if the punishments for many offenses are put together.

On May 12, 2022, stablecoin UST and the crypto asset LUNA of the Terra Ecosystem crashed in a matter of days, widely recognized as the most turbulent event in the history of the crypto market.

Traders’ confidence was severely damaged by the surplus supply of LUNA and the quick depegging of UST. Both assets’ prices fell sharply as a result, and they were removed from major exchanges.

Terraform Labs Founder Do Kwon Faces Fraud Charges After Montenegro Arrest

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The founder of Terraform Labs, Do Kwon, has been arrested by Montenegrin police at an airport with falsified documents. This news comes after Kwon’s location had been a mystery for months, and he had been on an Interpol wanted list in connection with last year’s TerraUSD collapse. Kwon is also facing an investigation in South Korea and has already faced civil charges filed by the U.S. Securities and Exchange Commission (SEC).

Allegations of Market Manipulation & Fraud On Terraform Labs Founder 

Federal prosecutors in New York have charged Kwon with fraud, conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation. 

The complaint alleges that Kwon made a number of “untrue and misleading statements of material fact” over several years, citing T.V. appearances and tweets from accounts tied to Terraform Labs.

According to the filing, Kwon sought the assistance of a U.S. trading and investment firm to manipulate the market price of UST, which the firm reportedly provided. This allegation was also made by the SEC in its complaint.

According to Filip Adzic, the interior minister of Montenegro, Kwon was arrested with falsified documents at an airport earlier on Thursday. The Korean National Police Agency later confirmed his identity.

Kwon’s arrest represents a significant milestone in the ongoing investigation, as he has been the subject of multiple inquiries and was even the subject of an Interpol red notice. 

The collapse of the TerraUSD (UST) stablecoin and its $40 billion ecosystem last year sent shockwaves through the crypto markets, and Kwon was implicated in the incident.

The news of Kwon’s arrest was announced on Twitter by Filip Adzic, the minister of interior of Montenegro. Adzic’s account is followed by the official account of the prime minister of Montenegro, Dritan Abazovic, who retweeted the announcement. However, the account Adzic is unverified, and official confirmation of Kwon’s identity is still awaited.

Kwon’s extradition is being demanded by South Korea, the USA, and Singapore, and the Department of Justice has confirmed its intention to seek his extradition to the U.S.

This arrest represents a significant step forward in the investigation into the collapse of terraUSD and its associated ecosystem. The impact of this development on the broader cryptocurrency market is yet to be determined, but it is expected to attract close scrutiny from investors and regulators.

Related Reading | Coinbase CEO’s Stock Sell-Off Amidst Wells Notice Raise Eyebrows 

Terra’s Do Kwon Escapes To Serbia Via Dubai

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Terra’s co-founder Do Kwon is reportedly in Serbia, and South Korean authorities are seeking assistance from the Serbian government in the investigation.

“Recently, we obtained intelligence that CEO Kwon was in Serbia, and it was found to be true,” an official from the investigation stated.

31 years old Kwon Do-hyeong who headed Terraform Labs was the face behind the “Luna crisis” where investors lost over 50 trillion won due to the price collapse of the two sister tokens Luna and Terra in May.

Terraform Labs is the firm that issued both stablecoin Terra [UST] and crypto asset LUNA.

The Seoul Southern District Prosecutor’s Office’s Financial and Securities Criminal Unit obtained an arrest warrant for Kwon on charges of providing false information to investors in September, and Interpol also issued a ‘red wanted’, the highest level of wanted arrest and repatriation.

But just before the incident, Kwon quietly flew to Singapore in April and arrived in Dubai, United Arab Emirates before finally landing in Serbia. 

It is still unclear why CEO Kwon went to Serbia. But prosecutors believe he is fleeing abroad to avoid investigation and is trying to find out if there is any third party involved.

The Terra founder made a long-awaited appearance in an exclusive interview on October 18 with renowned author and crypto journalist Laura Shin, TronWeekly reported.

Shin, the host of the Unchained podcasts, posed some challenging questions to the evasive founder.

The first of which was about the Red Notice that Interpol had issued calling for his arrest. Kwon replied he did not receive any copy of the arrest warrant and was awaiting confirmation.

He expressed his dissatisfaction with the Financial Services Commission of South Korea, for “creating new regulations through criminal enforcement proceedings.”

Calling the charges “illegitimate and politically motivated,” Do Kwon said he is complying with all the document requests made by the South Korean prosecutors.

Recently, the embattled CEO took aim at former FTX CEO Sam Bankman-Fried blaming the latter for the Terra-LUNA crisis.

Terra Founder Accuses SBF of Putting Significant Wager On Luna’s Price

He alleged that either SBF or Alameda received $1 billion in TerraUSD stablecoins from Genesis Trading prior to the UST depeg.

According to Kwon, Sam Bankman-cryptocurrency Fried’s trading business Alameda placed a sizeable bet that the value of LUNA would fall.

Terra Do Kwon Tweets About How Genesis and SBF Triggered the Fall of Terra Ecosystem

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Do Kwon, a co-founder of Terra blames Genesis and former FTX CEO Sam Bankman-Fried for the Terra-LUNA crisis. He is convinced that Sam Bankman-Fried or Alameda received $1 billion in TerraUSD (UST) stablecoins from Genesis Trading prior to the UST depeg.

A market manipulation investigation into whether FTX and Alameda Research contributed to the Terra-LUNA crisis has been launched by federal prosecutors looking into the FTX crisis and its connection to Alameda Research.

Do Kwon wants everyone to come clean

Do Kwon, the founder of Terra, revealed how Genesis Trading, Sam Bankman-FTX, Fried’s, and the hedge fund Alameda contributed to the demise of TerraUSD (UST) stablecoin and Terra in a series of tweets on December 8. (LUNA).

Do Kwon claims that before the USD depeg, Genesis Trading acquired billions in UST from Luna Foundation Guard (LFG) and moved it to FTX or Alameda. SBF took advantage of the funds to manipulate prices in favor of companies like FTX and Alameda Research.

Do Kwon also questioned why, during the UST depeg, Alameda borrowed more than $1 billion in Bitcoin from Voyager. Additionally, Alameda requested an additional $10 billion in Bitcoin from other significant businesses. He wants SBF to make public the details of these significant transactions.

He thinks Alameda, a cryptocurrency trading company run by Sam Bankman-Fried, made a significant wager that the price of LUNA would decline.

Additionally, he discloses that Alameda was responsible for the “significant currency contraction that UST underwent in February 2021.” In order to deplete the Curve liquidity pools during the Magic Internet Money (MIM) crisis, Alameda sold 500 million in UST in a matter of minutes.

The New York Times reported on Wednesday that U.S. federal prosecutors are looking into whether Sam Bankman-Fried, the founder of FTX, manipulated the market for two cryptocurrencies in May, causing their demise and the demise of his own cryptocurrency exchange.

According to the report, the prosecutors are investigating whether Bankman-Fried manipulated the prices of two interconnected currencies, TerraUsd and Luna, to the advantage of the companies he controlled, including FTX and Alameda Research.

The investigation is still in its early stages, the newspaper reported, adding that it is unclear whether or when prosecutors started looking into the TerraUSD and Luna trades, or whether they have found evidence of Bankman-Fried’s wrongdoing.

Terra’s Do Kwon Accused of Terra Price Manipulation

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According to a local report from South Korea, the country’s prosecutors have evidence that suggests Do Kwon, a co-founder of Terraform Labs, once gave employee instructions to alter the price of Terra Luna Classic (LUNC).

An official from the South Korean Prosecutors Office is quoted in a report by Korean Broadcasting System (KBS) on Nov. 3 as saying that they have procured a “conversation history” in which “CEO Kwon specifically ordered price manipulation.”

A “messenger conversation” between Kwon and a former Terraform Labs employee was reportedly used as the basis for the reported evidence. The prosecution withheld additional information, stating that more details can’t be revealed.

“It was a conversation history where CEO Kwon specifically ordered price manipulation.”

The exact details of Terra price manipulation are unclear

The price action of Terra’s LUNC (previously LUNA) during the previous bull market was unquestionably one of the most impressive across all cryptocurrencies, even though the specifics of the price manipulation are still unknown.

From $4.18 in late May 2021 to its all-time high of $119.18 on April 5, its price increased by more than 2,800%. Before its catastrophic fall on April 30, 2022, according to data from CoinGecko.

However, the report notes that Kwon’s agent has persisted in refuting these accusations.

Additionally, Kwon and his representatives have in the past refuted claims that they broke the capital markets regulations in South Korea.

In September, Terraform Labs claimed that the prosecution’s case against its co-founder had become “highly politicized” and that, in response to pressure from the public, prosecutors had broadened the definition of security.

Despite Kwon’s co-founder of the Terra ecosystem having previously claimed he is “not on the run,” it is still unclear where he is.

According to earlier reports, Kwon initially relocated from South Korea to Singapore before moving to Dubai, United Arab Emirates (UAE). Now, according to the KBS report, Kwon is allegedly living in Europe without a passport as of November 3.

However, in one of his most recent tweets, he stated that he is going to throw a meetup to get over all the nonsense about his hiding.

Kwon also added that cops from the world over are welcome to attend.

Terra’s Do Kwon Has Reportedly Left for Dubai

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Terra’s Do Kwon seems to be in a wave of trouble. Forkast verified with South Korean prosecutors that Kwon Do-Hyung, the co-founder and CEO of Terraform Labs Pte Ltd., also known as Do Kwon, departed Singapore last month and arrived in Dubai, United Arab Emirates.

Given that there are no records of Kwon entering the UAE through the airport, an investigation team is assessing the probability that Kwon had a layover in Dubai. Local law enforcement agencies have asked neighboring nations to assist in locating Kwon.

Terra Do Kwon’s whereabouts were a secret

Since the Terra-LUNA accident in May, Kwon’s precise location has remained a mystery. Many people theorized that he was in Singapore because that city-state was Kwon’s last known location.

“It’s not in the interest of being on the run. It’s just that every time the location where I live becomes known, it becomes almost impossible for me to live there.” 

Kwon said during a recent interview 

Following the collapse of the Terra stablecoin and cryptocurrency, which destroyed more than US$60 billion in market value, South Korea is looking into Kwon and Terraform Labs colleagues on a number of counts, including fraud and violating the Capital Markets Act.

The investigation’s lead office, the Seoul Southern District Prosecutors’ Office, has filed an arrest order, is working to invalidate Kwon’s passport, and has asked Interpol to put a “red notice” on him.

A red notice requests that international law enforcement find and temporarily detain a person.

Author and cryptocurrency journalist Laura Shin discussed the entire Do Kwon affair on Twitter. Shin voiced her worry and displeasure with the retail investors who were looking for Do Kwon’s secret location.

She also agreed with Kwon’s choice to keep his location a secret. Shin also discussed the claims that Kwon was engaging in fraud.

A Terra whistleblower named Fatman, who is most known for sharing his unbiased feedback on many projects, has something to say. He shared his Twitter thread with Shin, highlighting the significant turning points in Terra’s conspiracy journey.

Do Kown asserted yesterday that Luna Foundation Gaurd (LFG) had contracted with an on-chain analysis business to release a report. Do Kwon said the impending study will shed light on all LFG trade to demonstrate there had been no money misappropriation or theft.

Do Kwon Apologizes To Terra Investors In A Rare Interview

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Do Kwon, the founder of Terra, made a long-awaited appearance in an exclusive interview on October 18 with renowned author and crypto journalist Laura Shin.

Since the Terra Blowout in May this year, Shin, host of the Unchained podcasts, has posed some challenging questions to the evasive founder.

The stablecoin UST and crypto asset LUNA of the Terra Ecosystem collapsed in a matter of days, wiping out the savings of countless people on May 12.

Do Kwon was first questioned about the Red Notice that Interpol had issued calling for his arrest. In response, Kwon said he was waiting for confirmation and refuted having obtained a copy of the arrest warrant.

He expressed his dissatisfaction with the Financial Services Commission of South Korea, for “creating new regulations through criminal enforcement proceedings.”

Calling the charges “illegitimate and politically motivated,” Do Kwon said he is complying with all the document requests made by the South Korean prosecutors.

He then mentioned how he had to deal with one of the worst effects of the collapse: investors losing billions of dollars across the globe. On one occasion, Shin asked Kwon how he felt about the suicide of an investor who lost his life savings, Kwon looked upset and expressed remorse.

I own up to the responsibility fully. It’s not easy — the hardest thing about the current situation is having to contend with so much astronomical loss. It’s quite hard to put into words, but the scale of the financial and emotional and economic damage that happened here is not easy to live.

The terra founder brushed aside reports of cashing out just before the event, calling them “too much misinformation”.

When Shin confronted him with on-chain evidence of 65 million worth of BTC being deposited on KuCoin and OKEx, Kwon retorted that transferring Bitcoin does not always imply selling on spot exchanges and that his auditing firm would soon come out with a report on the same.

Do Kwon Comes Clean On His “Cocky Attitude”

Do Kwon was also accused of having a “cocky attitude” which became notorious during his time on social media. He said he got “carried away with crypto Twitter” and “looking back now it seemed cringe”. But refuse to delete his controversial tweets or posts.

He further appealed to developers to learn from their errors while continuing to work on developing decentralized money that is “more robust, more transparent, and resistant to failure” in addition to being censorship-resistant.