Do Kwon, the co-founder of Terraform Labs, will be extradited to the United States from Montenegro, where he is currently in detention. Montenegro’s “top justice official” privately said he plans to send the disgraced digital asset kingpin to the U.S. rather than South Korea, where he is also facing charges related to the dramatic collapse of the Terra ecosystem. Wall Street Journal reported citing anonymous sources.
Terraform Labs collapsed in May 2022 when its TerraUSD (UST) algorithmic stablecoin lost its peg to the U.S. dollar, leading to the printing of more of the company’s native token, LUNA, in an attempt to prop up UST. This, in turn, eventually led to a crash in LUNA, and the whole Terra ecosystem came tumbling down, with an estimated $60 billion being wiped out of the digital asset space.
Kwon promptly fell off the map, seeming to go into hiding—although he denied it—as authorities in his native South Korea issued an arrest warrant for him in September for violating capital market rules with Terraform Labs.
This was followed earlier by the U.S. Securities and Exchange Commission (SEC) suing
Terraform and its disgraced co-founder Kwon in February 2023, accusing them of orchestrating a “fraudulent scheme” and violating securities laws by selling unregistered securities.
Police in Montenegro arrested Kwon as he attempted to board a flight to Dubai, with South Korean police confirming his identity shortly after.
After Kwon’s arrest in Montenegro, U.S. prosecutors piled more pressure on him by
charging him with conspiracy to commit commodities fraud, securities fraud, wire fraud, conspiracy to defraud investors, and engaging in market manipulation.
On November 24, the Higher Court in Montenegro approved requests by South Korean and U.S. authorities to extradite Kwon, who is currently still in detention in the European country. It just remained to be seen which of his global would-be prosecutors would get a first stab at Kwon.
As of Thursday’s report, it seems the U.S. will likely be the disgraced Terraform founder’s destination.
The WSJ cited “closed-door discussions” with Montenegrin Justice Minister Andrej Milovic, who said he plans to extradite Kwon to the U.S, according to anonymous sources.
Milovic has not yet announced his decision publicly and may wait for the country’s courts to rule on a last-ditch appeal by Kwon against the extradition ruling, said the WSJ report.
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