Feds demand $5billion from Do Kwon and fight to extradite him to US

• The SEC ordered Do Kwon to pay over $5 billion in restitution for Terra collapse
• US and South Korea both want to jail Kwon and are in an extradition battle
• The downfall of the Terra crypto ecosystem cost investors up to $60billion

Unlike Sam Bankman-Fried who founded fraudulent crypto exchange FTX and has become a household name, Do Kwon has gone more under the radar, even though his crypto scheme, Terra, wiped out tens of billions more dollars in comparison.

But like Bankman-Fried or blood tech fraudster Elizabeth Holmes of Theranos, Kwon, 32, was an idiosyncratic leader that people all over the world were rooting for.

He had tech bona-fides out the wazoo, having earned a degree from Stanford University in computer science in 2015. He went on to work for Apple and Microsoft.

South Korea-born Kwon broke away and created Terraform Labs in 2018, supposedly applying his tech and coding genius to the wacky world of crypto.

For this, he was featured in Forbes’ 30 under 30 list in 2019 and was frequently among the who’s who of crypto conferences all around the world.

But now, both the US and South Korea are fighting over who will extradite the alleged crypto fraudster – who faces a slew of billion-dollar civil and criminal accusations – after the fugitive was finally apprehended in Montenegro in 2023.

Do Kwon (pictured) founded Terraform Labs, a blockchain and payment company, in 2018

Montenegrin police officers escort Kwon (pictured center) after he served sentence in prison for document forgery on March 23, 2024. Kwon had fake Costa Rican passports in an attempt to flee Montenegro

Pictured: Kwon marrying his wife in February 2021 in a glamorous ceremony, a little over a year before the Terra ecosystem went bust

Kwon created the cryptocurrency Luna, earning him the unofficial title ‘King of Lunatics’ from Bloomberg. He even named his daughter Luna – announcing her birth in April 2022: ‘My dearest creation named after my greatest invention.’

He also created as TerraUSD, a so-called stablecoin that was pegged to the US dollar, meaning it was always supposed to be worth $1.

At its peak in April 2022, Terra-related coins had a total market cap of around $60 billion, according to European crypto exchange Bitstamp. A month later, it practically went to zero.

Signs of impending doom were definitely there for those paying attention and not simply riding the Luna token to the moon.

One red-flag was the absurd, too-good-to-be-true 20 percent interest you could earn on the Terra blockchain’s lending-and-borrowing program.

And in early May, the worst-case scenario unfolded when skeptical investors triggered the collapse of TerraUSD and Luna by selling the stablecoin en masse. By May 9, the TerraUSD was worth $0.35, not a dollar like it was supposed to be. And on May 12, Luna’s price dropped 96 percent in a single day, leaving it at a measly $0.10.

Although just months before the Terra ecosystem went bust, Kwon fit in time to wed his glamorous fiancee in a ceremony he doted over on social media. He now shares a young daughter with his wife.

Kwon (pictured left) being interviewed at Terraform’s Singapore office by crypto outlet Coinage in August 2022, three months after the collapse of his crypto empire

Kwon (pictured) walking around carefree in aviators, mere months after some investors lost their life savings in the Terra Luna scheme

Kwon (pictured center) spent months tweeting and not facing consequences, criminal or civil, for what happened with Terra

Kwon (pictured middle left) is taken outside court by police in Montenegro on June 16, 2023 with a shaved head

Pictured: The wedding ceremony Kwon had just months before his crypto fund went bust

Kwon is then placed into a police vehicle

Big venture capital firms like Pantera Capital, Hack VC and the Winklevoss Twins’ CMCC Capital were all wise to Kwon’s scheme and got out months before the collapse in May.

Pantera even said it made a 100-fold return on their $1.7 million investment in Luna, CNBC reported.

Instead of facing the music right away, Kwon spent months tweeting and evading capture from US and South Korean authorities who both wanted to bring him up on fraud charges.

That changed when he was arrested in Montenegro in March 2023, police catching him with fake Costa Rican travel documents before he could flee to Dubai.

Kwon also faces a litany criminal charges from his home country South Korea and the Southern District of New York – the same office that prosecuted Bankman-Fried and got him locked him up for 25 years.

Now both countries are in a bitter battle to extradite the Stanford grad.

Amid a whirlwind of lawsuits and criminal charges against the 32-year-old crypto founder for his role in perpetuating the cliff dive of the Terra ecosystem, the Securities and Exchange Commission (SEC) ordered Kwon and Terraform Labs to pay $5.3 billion in penalties on April 19.

Kwon (pictured left) faces a litany criminal charges from his home country South Korea and the Southern District of New York – the same office that prosecuted FTX’s Sam Bankman-Fried

Kwon (pictured left behind the banner) poses with Terraform Labs employees at an event in China

Terraform Labs co-founders Daniel Shin (left) and Kwon (right) pictured together

Kwon (pictured) is currently out on bail awaiting extradition from either the U.S. or South Korea

The SEC also asked the court to ban Kwon from becoming an officer of director of any company that issues securities.

The massive fine came after a Manhattan jury on April 5 found Kwon and his company civilly liable for misleading investors prior to the 2022 collapse, CNN reported.

The SEC’s lawsuit also revealed that Kwon allegedly lied by claiming that South Korean payment app Chai used Terraform’s proprietary blockchain technology, when reality it used more traditional payment systems.

Following the serious allegations lodged against him, commentators were quick to compared him to another former Forbes accoladed start-up CEO – Elizabeth Holmes.

Holmes was famous for claiming that she ran Theranos blood tests on the company’s own Edison machine. Behind the scenes, the Edison didn’t work, and she was running tests on existing commercial machines.

As of March 2024, Kwon is out on bail awaiting his extradition, CoinDesk reported.

Kwon could face a much lengthier sentence if he is tried in the US – possibly 100 years – as opposed to South Korea.

The prosecutor from his home country is reportedly seeking 40 years, which for the 32-year-old would still be a life-altering punishment.

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