South Korea Intensifies Push To Extradite Terra-Luna Founder For Crypto Scandal

Key Points:

• South Korean prosecutors are intensifying their efforts to bring back Do Kwon and five other Terraform Labs employees to Korea to face fraud charges related to Terra-Luna stablecoin.
• Terraform Labs denied any wrongdoing, but Kwon acknowledged his responsibility for the Terra project’s failure.

South Korean prosecutors are increasing their efforts to bring South Korean national Kwon Do-hyung, also known as Do Kwon, and five other Terraform Labs employees back to Korea to face fraud charges related to the now-collapsed Terra-Luna stablecoin.

The project was developed by Terraform Labs, which is based in Singapore. Kwon and his colleagues were listed in an arrest warrant issued last September. South Korean prosecutors are now expanding their cooperation with overseas legal agencies and counterparts to facilitate their arrest and extradition. This will help efforts to return the accused to Korea, but the prosecutor’s office declined to give further details on the status of legal assistance with overseas counterparts.

Last month, the US Securities and Exchange Commission filed a lawsuit against Terraform and Kwon for allegedly defrauding investors by hosting a “multi-billion dollar crypto asset securities fraud.” The Federal Bureau of Investigation and the Southern District of New York prosecutors are also investigating former Terraform employees equally as the SEC lawsuit. Singapore police have launched their own investigation into Terraform Labs.

Terraform Labs has denied any wrongdoing, stating that Luna cryptocurrency has never been a financial security. During his podcast appearance last year, Kwon acknowledged his responsibility for the Terra project’s failure but insisted no fraud was involved.

Meanwhile, the Seoul prosecutor’s office confirmed that it is considering requesting an arrest warrant for Terraform co-founder Daniel Shin, who is accused of fraudulently misrepresenting the Luna cryptocurrency and profiting by as much as US$100 million selling the token before it collapsed.

Shin denied the accusations, saying that he sold most of his Luna holdings before the price surge and still held a significant amount during the May cryptocurrency collapse. He also denied the accusations that he promoted Terra stablecoin as a payment method despite multiple warnings from authorities, claiming he had never received such notices. In December, a South Korean court rejected prosecutors’ request to issue Shin an arrest warrant.

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