Cryptocurrencies Cryptocurrency entrepreneur in New York court for fraud
Following the extradition of South Korean cryptocurrency entrepreneur Do Kwon to the USA, he was brought before a federal judge in New York on Thursday. The judge opened proceedings against the 33-year-old for fraud and money laundering.
03.01.2025, 03:25
SDA
He had been on the run from the US and South Korean authorities for almost a year. If found guilty on all nine charges, he faces a sentence of up to 130 years in prison.
Kwon must answer for fraudulently deceiving investors about the true value of his cryptocurrency company Terraform Labs, explained US Attorney General Merrick Garland. Accordingly, Kwon had defrauded investors of more than 40 billion dollars in total. The cryptocurrency Terra collapsed in May 2022.
Kwon is also under investigation in his home country for the fraud. His business partner, whose only initials are J. C. H., was extradited from Montenegro to South Korea in early February 2024.
Interpol searched for Kwon
Kwon was the head and co-founder of the Singapore-based start-up Terraform Labs, which issued the cryptocurrencies TerraUSD and its sister currency Luna. The entrepreneur issued the two currencies as so-called stablecoins, which are pegged to traditional currencies such as the US dollar in order to prevent major fluctuations in value. In reality, however, Kwon did not hedge his cryptocurrencies with safe investments such as government bonds.
Both imploded in May 2022, Terraform Labs went bankrupt and Kwon withdrew. South Korea then called Interpol to have Kwon declared a wanted person in 195 Interpol member states worldwide.
Kwon fled from South Korea via Singapore to Montenegro. He was arrested there in March 2023 at the airport in the capital Podgorica when he tried to fly to Dubai with a fake Costa Rican passport. At the time of his arrest, Kwon was one of the world's most wanted suspected white-collar criminals.
