On Friday, Montenegro’s Minister of Justice announced a decision to permit Do Kwon, the South Korean co-founder of Terraform Labs, to face extradition to the United States over his alleged role in the $40 billion collapse of the TerraUSD-Luna algorithmic stablecoins.
Kwon has also been sought in South Korea for the same collapse, which precipitated widespread crypto market turmoil in 2022.
However, Montenegro’s lack of an extradition treaty with the United States or South Korea prolonged the 18-month fight to bring the South Korean national to face charges in either country.
“The Minister of Justice, Bojan Bozovic, issued a decision approving the extradition of the accused, Kwon Do Hyung, to the United States of America,” said the Ministry of Justice on Friday.
The Ministry of Justice factored in several reasons for granting the extradition, including Kwon’s citizenship, the seriousness of the alleged crime, where the alleged crimes were committed and the potential of another extradition to a third country.
Despite facing a red notice from Interpol in 2022, the previously elusive Kwon had traveled extensively to avoid capture, and was en route to Dubai when he was arrested in Montenegro last year. In 2023, the U.S. Securities and Exchange Commission (SEC) formally charged Kwon and his company with a “multi-billion dollar crypto asset securities fraud.”
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD,” U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler said last year. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
