In a recent development, a group of South Korean investors affected by the Terra-Luna collapse has voiced their preference for Terraform Labs co-founder Do Kwon’s extradition to the United States rather than South Korea. This comes after a Montenegro high court decided to extradite Kwon to South Korea. The investors, part of an online community with over 2,700 members, expressed concerns over the adequacy of the legal consequences Kwon might face in South Korea.
The statement released by the community highlighted apprehensions regarding the potential leniency of South Korean legal proceedings in cases of cryptocurrency-related crimes. They fear that even if Kwon were to be sentenced in South Korea, the punishment might be significantly reduced upon appeal. This concern stems from the perception that South Korea has not yet established firm rules for penalizing crypto crimes.
Push for Do Kwon’s extradition to the US
The investors’ statement pointed out the differences between the South Korean and U.S. legal systems, especially in terms of sentencing for financial crimes. While South Korea’s maximum sentences for such offenses range from 30 to 40 years, the U.S. system allows for consecutive sentences for each count of crime, potentially leading to much longer prison terms. The community cited the case of Sam Bankman-Fried, suggesting a precedent for harsher penalties in the U.S.
The call for Do Kwon’s extradition to the U.S. is driven by a desire for a more severe punishment, reflecting the gravity of the financial loss experienced by the investors. They argue that a lighter sentence in Korea would not adequately address the harm caused by the Terra-Luna collapse, which erased over $40 billion in market capitalization in May 2022.
Background of Terra-Luna collapse and legal pursuit
The dramatic crash of Terraform Labs’ algorithmic stablecoin Terra and its sister cryptocurrency, Luna, led to significant financial losses for investors worldwide. Following the collapse, authorities in both the U.S. and South Korea have pursued charges against Do Kwon and Terraform Labs, including allegations of fraud and violations of securities laws. Do Kwon, who had been evading capture, was arrested in Montenegro in March for attempting to travel with fake documents.
The South Korean investor community’s statement underscores their ongoing struggle for justice and compensation. They emphasize the importance of a legal outcome that reflects the severity of the financial damage inflicted by the Terra-Luna collapse. As legal proceedings continue, the international debate over Kwon’s extradition highlights the complex interplay between national jurisdictions in addressing cryptocurrency-related crimes.
