- South Korea and the US have sought Do Kwon’s extradition for months over allegations of fraud linked to the collapse of the TerraUSD and Luna tokens
- Montenegro has approved Kwon’s extradition to the US, marking a significant development after legal battles in its courts
- Kwon, accused of orchestrating a multi-billion-dollar crypto fraud, also faces legal action in South Korea and spent time in a Montenegrin prison for document forgery
Do Kwon, the embattled South Korean cryptocurrency entrepreneur behind Terraform Labs, is set to be extradited to the United States from Montenegro after a protracted saga. Kwon’s extradition follows legal disputes and allegations of fraud that contributed to the collapse of TerraUSD and Luna tokens in 2022, which wiped out $40 billion from investors. Montenegro’s decision brings an end to the extended legal process which has also involved Kwon’s home country of South Korea.
Extradition Approval At Last
Kwon’s legal troubles began when TerraUSD and Luna, two high-profile tokens he championed, imploded in May 2022. The collapse triggered a massive sell-off in the broader cryptocurrency market and led to the start of the crypto winter.
The US Securities and Exchange Commission (SEC) accused Kwon of deceiving investors with false assurances about TerraUSD’s stability and Luna’s profitability, leading to a provisional settlement of $4.5 billion.
Montenegro’s Ministry of Justice announced that Minister Bojan Bozovic authorized Kwon’s extradition to the United States, noting, “It was concluded that the majority of the criteria prescribed by law favor the extradition request from the competent authorities of the United States of America.” Kwon, who is also wanted in South Korea for financial crimes relating to the Terra implosion, had expressed consent to be extradited to either country, signaling his willingness to face trial abroad.
Has Kwon Cut a Deal?
Kwon’s extradition has been an 18-month tug-of-war between the US and South Korea, leading to an Interpol “red notice” being issued for his arrest in September 2022, Kwon was detained in Montenegro in March 2023 while attempting to board a flight to Dubai using falsified travel documents. Earlier this year, Kwon served a four-month prison sentence in Montenegro for forgery while the two countries fought for the right to try him.
Kwon is charged with wire fraud, securities fraud, and conspiracy, which would almost certainly see a custodial sentence, although he may have cut a deal with prosecutors in order to reduce his sentence as part of the extradition deal.
