The US government finally got its metaphorical hands on Do Hyeong Kwon, the 33-year-old Korean national who built a financial empire on the cryptocurrency Luna and the 'stablecoin' TerraUSD, only to watch it all collapse in a wipeout that cost investors 40 billion dollars.
As private investors filed lawsuits and the governments of South Korea and the United States launched fraud investigations, Do Kwon was nowhere to be found. In 2022, the Korean government filed a “red notice” with Interpol, demanding Kwon's arrest and his return to Korea. A few months later, the Securities and Exchange Commission charged Kwon with fraud in the US.
On September 17, 2022, Kwon famously tweeted, “I'm not 'on the run' or anything like that,” but he also wouldn't say where he was. He did not help his cause when he was arrested by authorities in Montenegro in March 2023. At an airport. With false travel documents. On the way to a country without an American extradition treaty.
After spending time in a prison in Montenegro, Kwon fought extradition to both Korea and the US. This delayed the process by several months, but on December 31, 2024, he was shipped to US authorities. Today he appeared before a federal judge in New York City, where he pleaded “not guilty” to fraud.
The US Department of Justice cheered the extradition, with US Attorney General Merrick Garland pointing out that the US can sometimes reach people in surprising ways.
“We secured this extradition despite Kwon's alleged attempt to cover his tracks by laundering the proceeds of his schemes and attempting to use a fraudulent passport to travel to a country that did not have an extradition treaty with the United States.” , Garland said in a statement. “This extradition from Montenegro is an example of the Justice Department's international partnerships, which enable the pursuit of criminals wherever they try to hide.”
Five alleged misrepresentations
In terms of charges, the US also opened a massive indictment against Kwon today, which you can read here (PDF) if you want all the gory details.
The basic allegation is that Kwon “deceived investors by falsely advertising the company's blockchain products as decentralized, reliable and effective, and by engaging in market manipulation, ultimately resulting in more than $40 billion in investor losses ,” the US government said. This, the government claims, happened in five key ways:
