8. December 2023

• Do Kwon, the founder of failed blockchain project Terra, could stay in custody for up to six months while Montenegro’s courts consider an extradition request from South Korea.
• He is wanted by South Korean prosecutors who allege he committed fraud and US authorities have charged him with 8 counts of fraud.
• The SEC has also sued Terraform Labs and CEO Kwon for allegedly orchestrating a multibillion-dollar cryptocurrency fraud.

Do Kwon in Custody

On Thursday, a Montenegro court extended Do Kwon’s stay in custody for an additional six months as he awaits trial for possible extradition, according to a report by Radio Free Europe. The disgraced crypto boss has been in a Montenegrin jail since late March, when he was arrested for allegedly using forged travel documents.

US Charges Against Kwon

Kwon had fled South Korea and subsequently Singapore prior to the company’s collapse in May of last year. After his arrest, he was charged with eight counts of fraud in New York, including securities fraud, wire fraud, commodities fraud, and conspiracy. US prosecutors alleged that Kwon made a series of false and misleading statements during a TV interview about the extent to which users had adopted the Terra blockchain.

SEC Sues Terraform Labs & CEO

The US Securities and Exchange Commission (SEC) has also sued Terraform Labs and CEO Do Kwon for allegedly orchestrating a multibillion-dollar cryptocurrency fraud. The commission said that Terraform and Kwon raised billions of dollars from investors during the period between 2018 to May 2022 by selling “crypto asset securities” in the form of synthetic assets or “mAssets” algorithmic stablecoin Terra USD (UST), and its sister cryptocurrency LUNA.

South Korean Prosecutors Target Crypto Assets

Last week it was reported that Korean prosecutors are targeting the cryptocurrency assets of Do Kwan. He allegedly funneled tens of millions of dollars out of Luna Foundation Guard (LFG), which he set up to help defend his now-defunct stablecoin TerraUSD’s peg to the dollar, according to Dan Sunghan director of financial crime investigation bureau at the Seoul Southern District Prosecution Service. The whereabouts of Kwan’s $29 million worth digital tokens which were transferred from crypto wallets remain unknown until today .

Extradition Request

The judge at the Higher Court ordered six month detention as there is an extradition case opened at this court at request from South Korea Marija Rakovic speaker for higher court told reporters . This decision follows recent announcement by high court approving bail document forge case .Kwan bail request granted after same court had previously rejected it .