SNEAK PEEK
- The Terra Luna incident raises jurisdictional challenges.
- CEO’s Kwon Do-hyung arrest prompts race for extradition.
- Kwon’s stance on jurisdiction may affect punishment severity.
Recently, Do-hyung Kwon, the 32-year-old CEO of Terraform Labs, has been arrested in Montenegro in connection to the infamous ‘Terra Luna’ incident that caused a global collapse in the value of virtual currency.
Kwon, who had previously argued against the jurisdiction of the United States during his escape, is now facing legal challenges as the incident resurfaces interest in the legal and jurisdictional complexities surrounding it.
According to the news by Reporter Kim Dong-ho, Kwon’s apprehension triggered a race between South Korea and U.S. law enforcement agencies to secure his extradition. As a central figure in the incident, Kwon’s potential testimony could provide crucial insight into the cause and aftermath of the crisis.
During his escape, Kwon differed against the judicial jurisdiction of the United States, and it is unclear whether he will maintain this stance in the future.
In addition, Kwon’s attorney protested the Securities and Exchange Commission’s (SEC) personal jurisdiction over their client, despite Terraform being a Singapore corporation and Kwon being a resident of Singapore. Kwon’s side argued that the judgment of personal jurisdiction is crucial, not just in the digital market but in a broader context as well.
However, there is a possibility that Kwon’s claim to deny the jurisdiction of U.S. authorities was made to reduce the severity of punishment in the future. In the United States, the principle of adding sentences for each crime is followed, which can result in a prison term of over 100 years. Furthermore, the SEC and local prosecutors have already established that virtual assets possess security properties, providing a basis for legal processing.
In contrast to the U.S., economic offenses in Korea carry a maximum sentence of only about 40 years. Similarly, Korea has no established standards or laws to determine whether a virtual currency is a security or not.
