Cryptocurrency investors in Korea welcomed the U.S. Justice Department's announcement that Do Kwon, the crypto tycoon involved in the 2022 collapse of TerraUSD and Luna coins, could face up to 130 years in prison if he is convicted of fraud and other charges.
The department made the announcement on Thursday (local time), saying the 33-year-old Korean national made his initial appearance in a New York court and pleaded not guilty to those charges.
On a Naver blog, where 2,750 victims gathered, was a statement welcoming the decision to punish the "scammer" in the United States.
On the cryptocurrency section on Blind, an anonymous community app for office workers in Korea, one investor wrote, "I'm really relieved he's being extradited to the U.S. instead of Korea."
Comments, such as "I now understand why Kwon made such a fuss about wanting to be extradited to Korea," and "Someone like him should face strong punishment in the U.S.," have been posted.
Kwon, whose full name is Kwon Do-hyung, is the co-founder of the collapsed cryptocurrency firm Terraform Labs, the company behind TerraUSD stablecoin and its sister token Luna, which garnered significant attention before crashing in 2022.
Such responses came as the United States has a consecutive sentencing system, where sentences for individual crimes are added together. In Korea where cumulative sentencing is adopted, the maximum sentence for economic crimes is around 40 years in prison.
According to the department, charges against Kwon include two counts of commodity fraud, each carrying a maximum sentence of 10 years; two counts of securities fraud, each carrying a maximum of 20 years; two counts of fraud using communication networks, each carrying a maximum of 20 years; two counts of conspiracy to commit commodity fraud, securities fraud and fraud using communication networks, each carrying a maximum of 5 years; and one count of money laundering, which carries a maximum of 20 years.
If convicted on all charges, Kwon could face a sentence of up to 130 years, according to the department.
"Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform's cryptocurrencies, which resulted in over $40 billion in investor losses," U.S. Attorney General Merrick Garland was quoted as saying in a press release.
"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."
The U.S. received Kwon's custody from Montenegro on Tuesday, one year and nine months after he was arrested at the Podgorica International Airport on March 23, 2023.
The Korean government also requested the extradition of Kwon to secure his custody, and Kwon himself expressed a preference for being extradited to Korea instead of the U.S. However, his attempt was unsuccessful.
Before his criminal trial, Kwon had already lost a lawsuit filed by the U.S. Securities and Exchange Commission in June of last year, agreeing to pay $4.47 billion in restitution and fines as compensation for the victims.
However, in September, Terraform Labs received approval for bankruptcy, stating that only between $184.5 million and $442.2 million could be paid to investors as part of the bankruptcy liquidation. This indicates that it will be difficult to pay the originally agreed-upon amount in fines.
The Korean court approved the confiscation of Kwon's assets amounting to approximately 233.3 billion won ($159 million). However, it is expected that actual confiscation and recovery will be challenging.
There are about 200,000 victims in Korea, and the scale of the damages is estimated at around 300 billion won.