US judge seeks clarification on Dokwon’s foreign charges

Do Kwon has pleaded guilty to two felonies and is scheduled to be sentenced on Thursday, with a U.S. federal judge questioning prosecutors and defense attorneys about the Terraform Labs co-founder’s legal troubles in his home country of South Korea and Montenegro.

In a Monday filing in the U.S. District Court for the Southern District of New York, Judge Paul Engelmayer asked Kwon’s lawyers and attorneys representing the U.S. government about the charges and “maximum and minimum sentences” the Terraform co-founder could face in South Korea. Kwon could serve prison time in the United States, and he is expected to be extradited to South Korea.

Kwon pleaded guilty in August to two counts of wire fraud and conspiracy to commit fraud, and Engelmayer is scheduled to be sentenced on Thursday.

sauce: courtroom observer

In addition to questions about Kwon’s potential prison time in South Korea, the judge also asked whether there was an agreement that “Kwon’s time in Montenegro” (where he served a four-month sentence for using false travel documents and fought extradition to the United States for more than a year) would not be included in his U.S. sentence.

Judge Engelmayer’s questions suggested that South Korea’s authorities may release him early if the United States agrees to extradite him to South Korea to serve “the second half of his sentence.”

Kwon was one of the most prominent figures in the cryptocurrency and blockchain industry in 2022 before the collapse of the Terra ecosystem, but many experts agree that he contributed to the market crash, with the Terra ecosystem declaring collapse and several companies declaring bankruptcy, resulting in huge losses for investors.

The defense has asked that Kwon serve no more than five years in prison in the United States, but the prosecution has asked for at least 12 years.

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The U.S. government’s sentencing recommendation said Kwon “caused losses that exceeded the losses” of former FTX CEO Sam Bankman Fried, former Celsius CEO Alex Mashinsky, and OneCoin’s Carl Sebastian Greenwood combined. All three are serving multi-year sentences in federal prison.

Will Do Kwon serve his sentence in Korea?

Lawyers for the Terraform co-founder said that even if Engelmayer were to sentence Kwon to prison, he would be “immediately re-entered into pretrial detention pending criminal charges in South Korea” and could face up to 40 years in prison in his country of citizenship.

Thursday’s sentencing hearing could mark the beginning of the end of Kwon’s chapter in the 2022 collapse of Terraform. His whereabouts during the crypto market downturn were not publicly known until he was arrested in Montenegro and detained pending extradition to the United States, where he was indicted in March 2023 for his role in Terraform.

South Korean authorities issued an arrest warrant for Kwon in 2022, but have not detained him since the Terra ecosystem collapsed. The country’s prosecutors applied for Mr. Kwon’s extradition from Montenegro at the same time as the United States, while pursuing similar cases against individuals connected to Terraform.

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