Do Kwon is set to be sentenced on Thursday after pleading guilty to two felony counts, with a US federal judge inquiring about the Terraform Labs co-founder’s legal issues in South Korea and Montenegro.
In a filing on Monday in the US District Court for the Southern District of New York, Judge Paul Engelmayer asked Kwon’s legal team and attorneys for the US government regarding the charges and the “maximum and minimum sentences” he may face in South Korea, where he is anticipated to be extradited after potentially serving time in the United States.
Kwon pleaded guilty to two counts of wire fraud and conspiracy to defraud in August and is set to be sentenced by Engelmayer on Thursday.
Alongside the queries regarding Kwon potentially serving time in South Korea, Judge Engelmayer asked if there was a consensus that “none of Mr. Kwon’s time in custody in Montenegro” — where he served four months for using false travel documents and contested extradition to the US for over a year — would be counted towards any potential US sentence.
The judge’s inquiries reflected concerns that if the US permits extradition to South Korea to serve “the back half of his sentence,” the authorities there might release him early.
Kwon was a prominent figure in the crypto and blockchain industry in 2022 before the collapse of the Terra ecosystem, which many experts agree played a significant role in a market crash leading to numerous bankruptcies and considerable investor losses.
Defense attorneys requested a maximum of five years for Kwon in the US, while prosecutors are advocating for a minimum of 12 years.
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The US government’s sentencing recommendation stated that Kwon had “caused losses that eclipsed those caused” by former FTX CEO Sam Bankman-Fried, former Celsius CEO Alex Mashinsky, and OneCoin’s Karl Sebastian Greenwood combined, all of whom are serving lengthy sentences in federal prison.
Will Do Kwon serve time in South Korea?
Kwon’s lawyers mentioned that even if Engelmayer were to grant him time served, he would “immediately reenter pretrial detention pending his criminal charges in South Korea,” which could potentially lead to up to 40 years in prison in his home country.
Thursday’s sentencing hearing may signify a turning point in Kwon’s saga following the 2022 collapse of Terraform. His whereabouts during the crypto market downturn remained unknown until his arrest in Montenegro, where he awaited extradition to the US after being indicted in March 2023 for his involvement with Terraform.
Authorities in South Korea issued an arrest warrant for Kwon in 2022 but have not secured his custody since the collapse of the Terra ecosystem. The country’s prosecutors sought his extradition from Montenegro concurrently with the US, while pursuing similar cases against individuals associated with Terraform.
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