Do Kwon, co-founder of Terraform Labs Pte, has been charged by both US and South Korean authorities for his alleged involvement in a cryptocurrency fraud that resulted in the loss of $40 billion in market value. Currently, Kwon is in jail in Montenegro, and both countries have expressed their intention to request his extradition. While Montenegro’s justice minister, Marko Kovac, has said that a judge will decide how to proceed, the country’s law on international legal assistance in criminal matters has been used in the past to extradite fugitives to the US.
The legal process of extradition involves one country turning over a person to another country to face prosecution or punishment. The rules governing this process are typically outlined in bilateral or multilateral treaties that define the legal process to be followed, the offenses covered, and the appeals process.
Neither the US nor South Korea has a direct extradition treaty with Montenegro. Still, they can use other legal mechanisms to obtain Kwon’s custody, such as the European Convention on Extradition. When two or more countries seek extradition, Montenegro’s court considers various factors, including the seriousness of the offenses, where the crimes were committed, when each country made its request, and the fugitive’s nationality.
While South Korea may have a stronger legal claim to Kwon since he is a citizen of the country and was first charged there, politics and diplomacy could also influence the decision. Montenegro, as a NATO member, and South Korea, as a US defense treaty ally, may want to avoid directly challenging the US. Therefore, the countries could come to an agreement where one country or the other will proceed first. The US may argue that it has a better ability to prosecute Kwon and seize any of his assets worldwide. The US could then share the proceeds of these seizures with victims from South Korea.
If Kwon is extradited, he can challenge the extradition by arguing that the offenses he is being charged with are not crimes in both countries. Extradition disputes can last for months or even years, but Kwon will have to consider where he would spend his time if he chooses to challenge the extradition.
In the past, Roger Ng, a former Goldman Sachs Group Inc. banker, was released from custody by Malaysia so that he could be prosecuted and sentenced first in New York in the 1MDB case. Similarly, if Kwon is sent to South Korea, the country could choose to send him to the US for the first trial.
Kwon’s fellow crypto mogul, Sam Bankman-Fried, initially fought extradition to the US on fraud charges. However, after being taken from his luxury penthouse and locked up in a notorious Bahamian prison, he changed his mind. Bankman-Fried is now awaiting trial at his parents’ house in California while free on a $250 million bail package.
In conclusion, the decision on who gets Kwon into a courtroom first on crypto fraud charges will depend on various legal and political considerations. Montenegro’s court will have to consider several factors before deciding which country will have priority. While South Korea may have stronger legal footing, the decision could be influenced by politics and diplomacy. Nevertheless, both countries could come to an agreement, and Kwon could challenge the extradition by arguing that the offenses he is being charged with are not crimes in both countries.
