Montenegro authorizes the extradition of Do Kwon to the United States, where he will face charges related to the collapse of Terraform Labs and its impact on the crypto ecosystem.
The Ministry of Justice of Montenegro has issued a statement confirming the approval of the extradition of Do Kwon, founder of Terraform Labs, to the United States.
The decision, signed by Minister Bojan Božović, comes four months after his possible extradition to his native South Korea was announced. However, after a more detailed analysis of the facts surrounding his arrest, the Ministry has decided that Kwon will be sent to the US.
According to the official statement, the decision to extradite Do Kwon was based on a thorough analysis of the facts and circumstances of the case. The ministry said key criteria such as the seriousness of the crimes, the place where they were committed, the order of the extradition requests, Kwon's nationality and the possibility of future extradition to another country were evaluated.
Following this careful assessment, the Montenegrin government agency determined that the majority of criteria favored the U.S. request, leading to the authorization of his extradition.
Do Kwon's arrest after the collapse of Terra
Do Kwon was arrested in Montenegro in March 2023, at Podgorica airport while trying to travel to Dubai with a fake passport. This arrest came after months of international manhunt. The founder of Terraform Labs had fled his native South Korea after the collapse of Terra in May 2022 triggered an unprecedented crisis in the cryptocurrency market.
The Terra ecosystem, which included the algorithmic stablecoin TerraUSD (UST) and the native cryptocurrency LUNA, collapsed when UST lost its parity with the US dollar. This event, known as the “Terra-LUNA crash,” wiped over $40.000 billion off the market and set off a chain reaction that led to the bankruptcy of several cryptoasset companies, such as Celsius Network.
Kwon was accused of misleading investors about Terra’s stability and concealing critical risks associated with the tokens.
The change in Montenegro's extradition decision
In August this year, the Supreme Court of Montenegro had rejected Kwon's extradition to the United States, as reported Bit2Me News. At the time, the court argued that South Korea’s request took priority over the US one, based on the country’s International Legal Assistance in Criminal Matters Act, which states that extradition requests should be assessed in the order in which they are submitted.
However, the situation has recently changed. Following a thorough review, the Ministry of Justice of Montenegro determined that the US extradition request met the necessary legal criteria and that the seriousness of the charges justified this step. Preparations are currently underway to transfer Do Kwon to the United States, where he will face trial for financial fraud and market manipulation.
The charges against Do Kwon
Do Kwon faces a number of serious charges in the United States, including financial fraud, market manipulation and violation of securities laws. If convicted, he could face a prison sentence of decades, given the scale of the losses caused by the collapse of Terra.
Kwon also faces charges in South Korea, where he could be extradited after serving his sentence in the United States. South Korean authorities accuse him of violating the capital markets law and committing financial fraud.
Do Kwon's case is an example of how international authorities are working together to hold key players in Terra's collapse accountable. While a date for the extradition has not yet been specified, this step marks a new chapter in his legal battle and could have significant repercussions in the cryptocurrency space.
