Do Kwon May Face Trial in South Korea Despite 15-Year US Sentence

TLDR

• Do Kwon may face prosecution in South Korea despite receiving a 15-year prison sentence in the United States.
• A New York court sentenced Kwon to 15 years and ordered $19 million forfeiture after fraud convictions.
• Kwon may apply for the International Prisoner Transfer Program after serving half his US sentence.
• South Korean prosecutors hold a 2022 arrest warrant citing Capital Markets Act violations.
• Korean authorities estimate 200,000 victims with losses totaling about 300 billion won.

Do Kwon may face criminal charges in South Korea despite being sentenced to 15 years in the United States for fraud. Korean prosecutors confirmed the possibility of a separate trial if he is extradited. The case stems from the collapse of TerraUSD and Luna, which caused major investor losses as prosecutors in Seoul said domestic proceedings are independent of the US conviction.

US Sentence and Possibility of Transfer

According to a recent report by Blockonomi, Kwon received a 15-year prison sentence after pleading guilty to fraud and conspiracy charges in a New York court. Judge Paul A. Engelmayer imposed the term and ordered $19 million in forfeiture. The court cited investor losses of $40 billion.

During sentencing, Engelmayer said, “There are few frauds that have caused as much harm as you have, Mr. Kwon.” Prosecutors initially requested 12 years. The court increased the sentence due to the scale of the losses. Kwon admitted to conspiracy to commit fraud and wire fraud as part of a plea deal. He faced a potential sentence of up to 130 years before the agreement. His lawyers requested a five-year sentence.

Kwon’s legal team argued that the prosecution in Korea should reduce his sentence. The court rejected that argument. Engelmayer said speculation about future trials could not affect sentencing decisions. He may apply for the International Prisoner Transfer Program after serving half his sentence. US prosecutors agreed not to oppose that request. This could allow future prosecution in Korea.

South Korean Charges and Investor Losses

According to a report by The Korea Times, the Seoul Southern District Prosecutors’ Office has an active arrest warrant for Kwon, issued in September 2022. The charges include violations of the Capital Markets Act. Korean prosecutors say they intend to pursue the case if he returns. “A guilty verdict in Korea could lead to a sentence of more than 30 years,” a senior prosecutor said. He added, “Prosecuting Kwon domestically would best serve efforts to compensate local victims.”

Authorities estimate there are 200,000 victims in South Korea. Losses are valued at approximately 300 billion won, or $204 million. Ten alleged accomplices remain on trial in Seoul. Terraform Labs claimed TerraUSD maintained a dollar peg using algorithmic mechanisms. However, that peg failed in May 2021. Kwon said it recovered, but prosecutors later found hidden market support.

An investment firm secretly bought Terra to restore the peg. Despite that, both Terra and Luna collapsed again in May 2022. The crash wiped out billions in investor value. The Korean justice ministry has not confirmed any extradition timeline. US sentencing procedures do not prevent future charges elsewhere. Kwon remains in US custody following the court’s final ruling.

The post Do Kwon May Face Trial in South Korea Despite 15-Year US Sentence appeared first on Blockonomi.