U.S. still awaits extradition of suspected crypto fraudster Do Kwon

18 Jan 2024, 44 mins ago

The United States Securities and Exchange Commission postpones the trial of Terraform Labs and its co-founder, Do Kwon, pending Do Kwon’s extradition.

Background

On 20 February 2023, Gherson’s criminal litigation, investigations and regulatory team wrote a blog entitled “The United States charge Terraform Labs CEO Do Kwon in relation to crypto fraud”. 

This followed a previous blog titled “Crypto and INTERPOL – can INTERPOL issue a Red Notice in relation to allegations involving crypto?”, where we described how it was widely reported that South Korea have asked INTERPOL to issue a Red Notice for developer Do Kwon, who is the founder of the failed crypto currency Terra.  An INTERPOL Red Notice can be used to prevent an individual fleeing prior to an extradition request being issued.   

We then noted how it had been reported that the US Securities and Exchange Commission has charged Do Kwon and his company Terraform Labs with “orchestrating a multi-billion dollar crypto asset securities fraud”.

Update

Recent reports reveal that the trial of Terraform Labs and Do Kwon has been postponed pending Do Kwon’s extradition. Kwon also faces criminal charges in the US and further extradition request from South Korea. It will be very interesting to follow the next steps.

The US has faced difficulties in extraditing suspects in relation to crypto-related offences as we detailed in our recent blog UK High Court blocks extradition to the US for crypto-related allegations.

International dimension of offences involving crypto

As well as being at risk of INTERPOL measures, such as Red Notices, those who fear that allegations involving crypto have been made against them could also be at risk of extradition.

As was discussed in our previous blogs entitled “Can I be extradited for allegations involving crypto?” and “Another US crypto extradition”, any allegation of criminality will inevitably involve multiple jurisdictions, due to the borderless nature of crypto transactions.  As such, there may be numerous jurisdictions asserting authority and trying to extradite an alleged perpetrator to their jurisdiction to face justice.  Indeed, there have now been two examples of individuals being extradited to the US in relation to allegations involving crypto. 

The vast majority (if not all) of criminal allegations that underpin a crypto criminal investigation are of a financial crime nature, e.g. fraud, money laundering and insider dealing.  They can also include alleged offences relating to the breach of financial regulations.

These offences, by their very nature, can take place across multiple jurisdictions and are therefore types of offences for which multiple countries can assert jurisdiction, including in relation to conduct outside their own country (hence extradition can be an option). 

Indeed, due to the borderless nature of the effect of these crimes, a jurisdiction could assert authority against an individual who has not even stepped foot in that territory.

As such, jurisdictions might additionally utilise INTERPOL to locate an individual and seek their arrest prior to issuing any extradition request.

Therefore, due to the nature of this technology, and as this technology becomes more prevalent, there will surely be a large increase in the instances of INTERPOL being used to locate individuals accused of allegations involving crypto.

International crypto dimension – criminal investigations, litigation and extradition

Those who fear they may be subject to an extradition request from the UK, or who are just concerned about liability across multiple jurisdictions including the UK, should get in touch.

Gherson’s criminal litigation, regulatory and investigatory team combine an expert knowledge of criminal and regulatory law underpinned by a firm understanding of digital assets and blockchain technology.  As such, the team is able to provide expert strategic advice to anyone facing investigation in relation to any allegation of criminality involving cryptoassets. Working alongside the extradition team, Gherson’s criminal litigation, investigations and regulatory team is able to provide an unparalleled service in any case with an international dimension.  The team is also able to call upon lawyers in multiple other jurisdictions and build multi-jurisdictional teams to assist with any suitable defence.

INTERPOL, Red Notices and crypto

In addition, those who fear that a jurisdiction may have requested INTERPOL to process data relating to them involving any allegations of offences involving crypto, or are just concerned about potential liability, should get in contact.

Indeed, Gherson Solicitors LLP continue to receive requests for expert advice and assistance from those who fear they may have outstanding financial issues arising. That advice tackles:   

  1. How to best approach a possible INTERPOL red notice;
  2. Preparing for potential criminal proceedings / an extradition request;
  3. Preparing for a situation where a civil matter or commercial dispute could be used to initiate bogus criminal proceedings; and
  4. Exploring the possibility of instigating civil litigation proceedings to recover any misappropriated assets.

Gherson have previously written a series of blogs designed to assist those who fear they might be subject to INTERPOL measures (including a Red Notice):

INTERPOL and Red Notice Challenges

How to Remove an INTERPOL Red Notice

INTERPOL Red Notices and Extradition

How do I know if I am subject to an INTERPOL Red Notice

Regulation and compliance

In these constantly changing times, firms that deal with cryptoassets, and additionally have exposure to firms that do, will need to carefully consider all their systems and controls to ensure that they are able to comply with all relevant AML and sanctions regulations

How Gherson can assist

Gherson’s white-collar crime and regulatory team are able to provide advice and assistance with AML and sanctions compliance, including in situations involving cryptoassets

Additionally, the team has recently started a series on the regulation of crypto, with the aim of advising those who work in the compliance of this sector.  In addition, for those who would like advice on relevant issues, including those who have had issues with the FCA registration process, our specialist regulatory and compliance team can guide individuals and companies through the process.

Please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on XFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024