Key Notes
- Montenegro’s Justice Ministry approves Do Kwon’s extradition to the United States.
- Kwon will be transferred to US custody in the coming weeks.
- The 2022 Terra-LUNA crash wiped $40 billion from the cryptocurrency market, triggering global financial losses.
Montenegro’s Minister of Justice, Bojan Božović, has signed the order to extradite Do Kwon, the founder of Terraform Labs, to the United States, concluding months of legal and diplomatic deliberation.
The decision comes after the Supreme Court of Montenegro determined that both the US and South Korea met the legal requirements for extradition.
According to the Ministry of Justice, the decision was based on several factors, including the severity of charges, the sequence of extradition requests, and broader legal considerations. The US request took precedence as it was submitted first and detailed significant allegations of financial fraud and market manipulation.
“It was concluded that the majority of the criteria prescribed by law favour the extradition request from the competent authorities of the United States of America,” the Ministry of Justice said in a statement.
When Will Do Kwon be Transferred to US?
Do Kwon, who is currently detained at Montenegro’s Reception Center for Foreigners, is expected to be transferred to the United States in the coming weeks. According to the announcement, arrangements for the extradition are underway, and authorities are working to ensure a smooth handover to American law enforcement officials.
His extradition marks a critical step in ongoing efforts to hold him accountable for his alleged role in the collapse of the Terra-LUNA ecosystem, which caused billions in investor losses and widespread financial fallout across the industry.
Meanwhile, as a South Korean citizen, Kwon is still facing criminal charges in the country including violating capital markets law and committing financial frauds.
Do Kwon’s Role in the Terra-LUNA Collapse
In May 2022, the crypto market was rocked by the collapse of Terraform Labs’ flagship tokens, TerraUSD (UST) and LUNA. Marketed as a stablecoin, TerraUSD was supposed to maintain a 1:1 peg to the US dollar, but its algorithmic mechanism failed catastrophically.
The crash wiped $40 billion in value from the crypto market, causing a ripple effect that led to the bankruptcy of several digital asset companies including Celsius.
Kwon and Terraform Labs faced accusations of misleading investors about the stability of the Terra-LUNA ecosystem. Prosecutors allege that Kwon manipulated market data and failed to disclose critical risks associated with the tokens. He is also suspected of hiding substantial wealth to avoid legal liabilities.
Events Leading to Kwon’s Capture in Montenegro
After the Terra-LUNA crash, Kwon went into hiding, eluding authorities in South Korea, Singapore, and other countries. In September 2022, South Korean prosecutors issued an arrest warrant for Kwon, who was believed to be in Singapore at the time. Interpol later issued a Red Notice, marking him as a fugitive wanted by law enforcement worldwide.
Kwon’s flight came to an end on March 23, 2023, when he and his business partner, Han Cheng Jun, were arrested at Podgorica Airport in Montenegro.
The pair attempted to board a flight to Dubai using forged passports. Following his arrest, Kwon was sentenced to four months in prison for passport forgery, further delaying extradition proceedings.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
