Do Kwon, co-founder of Terraform Labs, is scheduled for sentencing on Thursday after pleading guilty to two felony counts. A US federal judge has specifically requested information from prosecutors and defense attorneys regarding Kwon's legal situations in his native South Korea and Montenegro.
In a filing submitted on Monday to the US District Court for the Southern District of New York, Judge Paul Engelmayer sought details from Kwon's legal team and US government attorneys concerning the charges and the potential maximum and minimum sentences Kwon could face in South Korea. It is anticipated that Kwon will be extradited to South Korea after potentially serving time in the United States.
Kwon previously pleaded guilty to two counts of wire fraud and conspiracy to defraud in August. His sentencing by Judge Engelmayer is slated for Thursday.
Beyond the inquiries about a potential prison term in South Korea, the judge also asked for clarification on whether there is an agreement that any time Kwon spent in custody in Montenegro—where he served a four-month sentence for using falsified travel documents and contested extradition to the US for over a year—would not be credited towards any potential US sentence.
Judge Engelmayer's questions suggested concerns that if the US were to grant extradition to South Korea for Kwon to serve "the back half of his sentence," South Korean authorities might release him prematurely.
Kwon was a highly visible figure in the cryptocurrency and blockchain industry in 2022, prior to the collapse of the Terra ecosystem. This collapse is widely considered by experts to have contributed to a market downturn, leading to bankruptcies for several companies and substantial financial losses for investors.
Kwon's defense attorneys have requested that he serve no more than five years in the US. Conversely, prosecutors are advocating for a sentence of at least 12 years.
The sentencing recommendation from the US government 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 three individuals are currently serving multi-year sentences in federal prison.
International Legal Ramifications for Do Kwon
The legal team representing Do Kwon indicated that even if Judge Engelmayer were to sentence Kwon to time served, he would "immediately reenter pretrial detention pending his criminal charges in South Korea." In South Korea, where he holds citizenship, Kwon could potentially face up to 40 years in prison.
The sentencing hearing scheduled for Thursday may represent the conclusion of Kwon's involvement in the aftermath of the 2022 Terraform collapse. His location during the crypto market downturn was not publicly known until his arrest in Montenegro. He was held in custody there awaiting extradition to the US, where he was indicted in March 2023 for his role in Terraform.
South Korean authorities had issued an arrest warrant for Kwon in 2022 but had not taken him into custody since the collapse of the Terra ecosystem. South Korean prosecutors submitted a request to extradite Kwon from Montenegro concurrently with the US, as they were pursuing similar legal actions against individuals connected to Terraform.