South Korean authorities are seeking the extradition of the co-founder and former CEO of Terraform Labs, Do Kwon. The prosecutor overseeing the investigation believes his repatriation would best serve the victims of the TerraUSD (USTC) and LUNA token collapses, The Wall Street Journal reported.
South Korea is the place where most of the crimes Kwon is accused of took place, according to Dan Sung-han, leader of South Korean prosecutors investigating the crash of the two cryptocurrencies, which erased nearly $40 billion from the Terra ecosystem.
“Given the nature of this incident, we think investigating the case in South Korea would be the most efficient way of bringing justice” to investors, the prosecutor said in an interview with the newspaper.
Do Kwon, also a South Korean citizen, was arrested in Montenegro in March and indicted on document forgery charges. Since then, authorities from the United States and South Korea have made efforts to extradite the Terra co-founder. He is also wanted by regulatory authorities in Singapore.
During a press conference after Kwon’s arrest, Montenegrin Justice Minister Marko Kovač said that a decision on his extradition would be based on “several factors,” including the severity of the criminal offense, as well as the location and time of the offense. Montenegro reportedly has no extradition treaty with either Singapore or South Korea. However, it has an old extradition agreement with the United States and has previously extradited American citizens.
In late April, South Korean officials indicted Shin Hyun-seong, also a co-founder of Terraform Labs, along with nine other individuals for the collapse of the Terra ecosystem on charges of fraud, breach of trust and embezzlement.
Prosecutors accused the individuals of earning illicit profits of nearly $350 million (460 billion Korean won), the Korean daily KBS World reported. Kwon would face similar charges if extradited to his home country, Sung-han told the Journal, with a jail term of up to 40 years.
Terra was one of the earliest crypto firms that popularized the concept of algorithmic stablecoins. The ecosystem collapsed when its native stablecoin TerraClassicUSD depegged from the U.S. dollar in May 2022, triggering a snowball crisis in the crypto industry last year.