Federal Judge Paul Engelmayer has requested details on the charges and maximum sentences Do Kwon faces in South Korea and Montenegro. Kwon pleaded guilty to two felonies: wire fraud and conspiracy to defraud. He is scheduled to be sentenced this Thursday. The central concern is credit for time served and the possibility of early release in South Korea, where he could face up to 40 years in prison.
The case of Terraform Labs co-founder Do Kwon is reaching its climax in the United States. After pleading guilty in August to two counts of wire fraud and conspiracy to defraud, his sentencing will be handed down this Thursday in the U.S. District Court for the Southern District of New York. However, Federal Judge Paul Engelmayer has introduced a legal complication: a formal request for clarification regarding Kwon’s pending legal issues abroad.
In a court filing on Monday, December 8th, Judge Engelmayer asked prosecutors and defense attorneys about the charges, as well as the “maximum and minimum sentences” Kwon could face in South Korea, his native country, and in Montenegro, where he served a four-month sentence for using falsified travel documents and fought extradition to the U.S.
The defense requested less than five years in the U.S., while prosecutors are pushing for a minimum of 12 years, arguing that Kwon caused “losses that eclipsed” those combined by figures such as Sam Bankman-Fried (FTX), Alex Mashinsky (Celsius), and Karl Sebastian Greenwood (OneCoin).
The Impact of Detention in Montenegro and the Impending Extradition
Judge Engelmayer’s questions reveal a significant concern regarding the administration of international justice. Specifically, he asked if there was an agreement that the time Kwon spent in custody in Montenegro would not be credited toward any potential U.S. sentence.
More importantly, the judge expressed concern that if the U.S. approves extradition to South Korea after Kwon serves a portion of his sentence in the U.S., South Korean authorities might release him prematurely. This is a critical point, as Kwon’s lawyers indicated that, even if the judge sentenced him to time served in the U.S., Kwon would “immediately reenter pretrial detention” in South Korea, where criminal accusations could lead to up to 40 years in prison.
In summary, Do Kwon’s sentencing and potential extradition in the U.S. could mark the beginning of the end of Kwon’s chapter in the 2022 collapse of the Terra ecosystem, an event that contributed to a market crisis leading to multiple bankruptcies. Although South Korea issued an arrest warrant for Kwon in 2022 and also sought his extradition from Montenegro, the upcoming U.S. ruling will set the precedent for the crypto ex-mogul’s legal future.