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 see it all come crashing down in a wipeout that cost investors $40 billion.
As private investors filed lawsuits, and as 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, seeking 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 am not ‘on the run’ or anything similar”—but he also wouldn’t say where he was. He didn’t help his case when he was arrested in March 2023 by the authorities in Montenegro. At an airport. With fake travel documents. On his way to a country with no US extradition agreement.
After serving some time in a Montenegro prison, Kwon battled extradition to both Korea and the US. This delayed the process by some months, but on December 31, 2024, he was shipped off to US authorities. Today, he appeared in front of a federal judge in New York City, where he pled “not guilty” to fraud.
The US Justice Department crowed about the extradition, with US Attorney General Merrick Garland pointing out that the US can sometimes get to people in surprising ways.
“We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes and trying 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 attempt to hide.”
Five alleged misrepresentations
As for the charges, the US also unsealed a massive indictment against Kwon today, which you can read here (PDF) if you want all the gory details.
The basic claim is that Kwon “defrauded 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,” according to the US government. This, the government alleges, happened in five key ways:
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