A United States federal judge is seeking clarity on the international legal consequences facing Do Kwon as the Terraform Labs co founder awaits sentencing on two felony charges. The questions were raised in a Monday filing in the US District Court for the Southern District of New York, where Judge Paul Engelmayer asked both prosecutors and the defense to outline the potential maximum and minimum sentences Kwon could face in South Korea after any prison term served in the United States.
Kwon pleaded guilty in August to wire fraud and conspiracy to defraud. He is scheduled to be sentenced on Thursday in New York as part of the criminal case tied to the 2022 collapse of the Terra ecosystem, an event that contributed to one of the worst downturns in crypto market history.
Judge concerns about extradition
In the filing, Judge Engelmayer also questioned whether time that Do Kwon spent in detention in Montenegro would count toward his US sentence. Kwon was arrested in Montenegro in 2023 for using falsified travel documents and served a four month sentence while fighting extradition requests from both the United States and South Korea.
The judge raised an additional concern. If US authorities later approve Kwon’s extradition to South Korea to serve the remainder of his total sentence, Engelmayer wants to know whether South Korean authorities could release him earlier than expected. The issue could influence how the judge calibrates the appropriate length of any US prison term.
Prosecutors are recommending that Kwon serve at least 12 years, arguing in a sentencing memo that the losses caused by Terra’s collapse exceeded those caused by Sam Bankman Fried, Alex Mashinsky and Karl Sebastian Greenwood combined. Defense attorneys, however, have urged the judge to impose no more than five years.
Possible prison time in South Korea
Kwon’s lawyers indicated that even if Judge Engelmayer sentences him to time served in the United States, Do Kwon would likely be taken into custody immediately upon returning to South Korea. He could face up to 40 years in prison under charges already filed there.
South Korean prosecutors issued an arrest warrant for Kwon in 2022 after the Terra ecosystem failed, but they did not have him in custody at the time. Authorities there submitted an extradition request to Montenegro simultaneously with US officials and have continued pursuing related cases involving other Terraform associates.
Thursday’s sentencing may begin the final chapter in the international legal battle surrounding the former crypto executive. Kwon disappeared from public view after Terra collapsed and resurfaced only when he was detained in Montenegro in March 2023. He was later indicted in the United States for his role at Terraform Labs and for misleading investors as the TerraUSD and LUNA tokens unraveled.
Conclusion
The sentencing of Do Kwon in the United States is likely only the first step in a lengthy legal process spanning multiple countries. With questions about extradition, sentencing credit and South Korea’s potential penalties, the judge’s ruling on Thursday will determine how Kwon’s legal journey proceeds and where he ultimately serves the bulk of his prison time.
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