Do Kwon Faces Possible Second Trial in Korea Following US Conviction

Do Kwon, now stuck with 15 years in a U.S. jail, could face another court case in South Korea. This round, local prosecutors want him locked up for over 30 years – so the pressure’s ramping up fast.

Manhattan Court Delivers Harsh Verdict

Judge Paul Engelmayer sentenced the 34-year-old crypto founder last Thursday in Manhattan federal court. He called the Terra collapse “a fraud on an epic, generational scale” that wiped out $40 billion from investor pockets. The judge rejected the defense team’s plea for a five-year cap and even went beyond the prosecutors, who wanted 12 years.

Kwon pleaded guilty back in August to wire fraud and conspiracy charges. The agreement forced him to forfeit $19 million in dirty money. His lawyers painted him as an overconfident entrepreneur who got in over his head, not some scheming villain. The court wasn’t buying it.

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Korea Waiting in the Wings

Here’s where things get messier for the Do Kwon trial situation. Back in September 2022, Seoul officials got a green light to grab him – just as Terra fell apart. Since then, they’ve just been sitting tight, biding their time.

A top legal officer in Seoul put it straight – “If found guilty here, someone might get over three decades behind bars.” Officials say about 200k people in Korea were hit, losing nearly 300 billion won ($204 million). With so much money gone, plenty of furious investors are now pushing hard for answers.

The charges center on violations of the Capital Markets Act. Korean prosecutors say they can pursue independent punishment regardless of what happened in the US. Ten alleged accomplices have been on trial in Korea for nearly three years already.

The Path Back to Seoul

US prosecutors agreed not to block a potential transfer under the International Prisoner Transfer Program. Kwon could apply after serving half his 15-year sentence. That’s about seven and a half years from now.

Judge Engelmayer shot down the defense argument that facing parallel prosecutions should reduce the US sentence. “A single courtroom can’t shape its decision on guesses about what a different one may rule.”

Kwon ended up attempting to get sent back to Korea rather than the U.S., following his arrest by Montenegrin officers at Podgorica’s airport in March 2023. He’d been using a phony Costa Rican ID while moving around. Cops kept him locked up locally for close to twenty-four months until they finally moved him to the States in December.

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The Terra Meltdown Explained

TerraUSD was supposed to be different. Kwon marketed it as an algorithmic stablecoin that would always hold its dollar peg without traditional backing. Luna, its sister token, was the mechanism that supposedly kept everything stable. At the time of writing this article, Terra Luna is trading at approximately $0.35 USD.

It turned out the entire situation was just an illusion. When TerraUSD dropped its link in May 2021, prosecutors said Kwon quietly hired someone outside to boost it back up. Instead of owning up, he covered it by saying smart code fixed everything.

Back in May 2022, once TerraUSD started crashing, Luna followed fast; chaos spread through crypto worldwide. The collapse helped trigger other major failures, including FTX. Judge Engelmayer estimated there may have been a million victims worldwide.

What Happens Next for Do Kwon Trial Proceedings

The Do Kwon trial timeline in South Korea remains unclear. If he transfers back after serving half his US sentence, he’d be in his early 40s, facing another lengthy legal battle. Korean authorities have made it obvious they’re not going easy on him.

His wife and four-year-old daughter still live in South Korea. Judge Engelmayer denied his request to serve time there, citing the need to satisfy the US sentence first.

More than 300 victims submitted impact statements to the Manhattan court. One investor wrote about contemplating suicide after his father lost retirement savings. Another described losing nearly $11,400 while juggling college bills, watching years of effort “evaporate, literally overnight.”

Broader Implications

The saga draws obvious parallels to other crypto fraudsters. Sam Bankman-Fried got 25 years for the FTX collapse. Both cases highlight how regulators worldwide are finally cracking down on the Wild West era of crypto.

One victim told the court he forgives Kwon and prays for his soul. But prosecutor Sarah Mortazavi had harsher words: Kwon created an “illusion of resilience while covering up systemic failure.”

Whether Kwon ends up facing the Do Kwon trial in Korea depends on several factors, including US prison behavior and diplomatic arrangements. But one thing’s certain: his crypto king days are long gone.

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How long is Do Kwon’s US prison sentence? 

He received 15 years from the Manhattan federal court for fraud related to the Terra collapse. He must serve at least half before becoming eligible for potential transfer.

What charges does Do Kwon face in South Korea? 

He faces Capital Markets Act violations and could receive over 30 years if convicted. Korean prosecutors obtained an arrest warrant in September 2022.

How much money did investors lose in the Terra crash? 

The collapse wiped out approximately $40 billion globally. Korean victims alone lost around $204 million across an estimated 200,000 investors.

Can Do Kwon serve his sentence in South Korea? 

Not immediately. He must serve at least half his US sentence first. US prosecutors agreed not to oppose a later transfer request.

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