[News Terms] 'Request for Surrender of Criminals' Seen Through the Controversy Over Kwon Do-hyung's Extradition

Kwon Do-hyung, CEO of Terraform Labs and the main culprit behind the crash of 'Terra·Luna coins,' was arrested by Montenegrin authorities after 11 months of fleeing abroad. The South Korean government has initiated procedures to extradite him back to the country, but some argue that he should first face trial in the United States, where the sentence is expected to be relatively harsher.

Kwon Do-hyung, CEO of Terraform Labs. Video capture from Yahoo Finance.

On the 23rd (local time), the Ministry of Justice announced that it had requested Montenegro to extradite Kwon immediately after news of his arrest became known. Earlier, the Seoul Southern District Prosecutors' Office's Financial Securities Crime Joint Investigation Team, which has been investigating the Terra·Luna incident, issued an Interpol red notice as soon as it was confirmed that Kwon fled after departing for Singapore in April last year and passing through Dubai. In September of the same year, a warrant for Kwon's arrest was issued on charges of violating the Capital Markets Act, and authorities have been tracking Kwon and his accomplices. Last month, after obtaining information that the group was staying in Serbia on the Balkan Peninsula, they visited the area and requested criminal cooperation.

The problem is that due to the nature of cryptocurrency, many victims have emerged worldwide, leading investigative agencies from various countries to compete to extradite Kwon and punish him directly.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit on the 16th of last month in the New York Federal District Court, accusing Kwon of causing at least $40 billion (approximately 51.82 trillion KRW) in damages to investors under securities fraud charges. Upon Kwon's arrest, the New York prosecutor indicted him on eight charges, including investor deception, financial fraud using internet banking, market manipulation, product fraud, and securities fraud. Singapore police have also been investigating Kwon since last month, suspecting him of cryptocurrency fraud amounting to 80 billion KRW. In Montenegro, Kwon is facing trials for possession of forged documents and extradition hearings, with the court extending his detention period by up to 30 days due to concerns over flight risk.

Extradition refers to the diplomatic process of transferring a suspect who committed a crime in one country and fled to another. Since Montenegro, South Korea, and the United States are all parties to the 'European Council Extradition Convention,' South Korea can request extradition from Montenegro. In situations where multiple countries compete for extradition, the decision on whether to repatriate Kwon to South Korea is likely to be determined by Montenegrin judicial authorities. Typically, under international law, the country that arrests the suspect decides the extradition destination.

Additionally, the country that contributed to the suspect's arrest, requested extradition first, or has the most victims is usually prioritized as the extradition country. The suspect's nationality, the possibility of recovering criminal proceeds, and the likelihood of punishment are also important factors in the decision.

The South Korean government is expected to assert priority in securing custody by citing Kwon's nationality to Montenegrin authorities. On the other hand, legal experts explain that since U.S. authorities have greater asset seizure powers in criminal cases than South Korea, the U.S. may first secure Kwon's assets and then partially transfer them to South Korea.

Meanwhile, on an online site where about 2,700 victims of the Terra·Luna incident in South Korea have gathered, a vote was held regarding Kwon's extradition country, with more than 7 out of 10 participants expressing the opinion that he should be extradited to the United States. This is because the U.S. imposes much harsher penalties on economic criminals who cause massive damage, including sentences of hundreds of years, compared to South Korea.