- Terraform Labs co-founder Do Kwon has been approved for extradition from Montenegro, although his destination remains uncertain
- Kwon is wanted by authorities in both the US and South Korea over his operation of Terraform Labs and its UST stablecoin
- The collapse of the UST stablecoin led to over $50 billion in losses
Terraform Labs co-founder Do Kwon will be extradited from Montenegro to face multiple fraud charges, but his destination is not yet known. Officials in the country have allowed Kwon to be extradited, with both South Korea and the US keen on taking him to task for the collapse of the UST stablecoin in 2022. UST collapsed in 2022 losing investors over $50 billion, with Kwon perpetually reinforcing the project’s strength in the weeks prior to its collapse.
Two-way Battle for Kwon
The Securities and Exchange Commission (SEC) opened proceedings against Kwon and Terraform Labs in February, accusing the former CEO of “orchestrating a multi-billion dollar crypto asset securities fraud,” alleging that he hid the truth over the stability of the protocol. The SEC also alleges that while promoting the LUNA token, Terraform and Kwon misled investors by falsely claiming that a prominent Korean mobile payment app utilized the Terra blockchain for transactions that would increase the value of LUNA.
Simultaneously, Kwon is wanted by Korean law enforcement who allege that he violated capital market rules through his operation of Terraform Labs, with the Seoul Southern District Prosecutor’s Office’s Financial and Securities Crime Unit issuing an arrest warrant against him, as well as founding member Nicholas Platias.
Echoes of Vinnik Case
The judiciary in Podgorica, Montenegro’s capital, has greenlit the extradition of Kwon, although a destination has not yet been determined. The approval comes after Kwon served a four-month prison term in Montenegro for document forgery.
The scenario is reminiscent of the battle for MtGox launderer Alexander Vinnik, which saw France, Russia, and the US engaged in a two-year battle which eventually went the way of France, before he was shipped off to the US after serving just a fifth of his sentence.
