Terra founder Do Kwon to be extradited to US or South Korea

abdelaziz Fathi

Montenegro’s High Court has greenlit the extradition of cryptocurrency entrepreneur Do Kwon, who faces fraud allegations in both the United States and South Korea. The decision, announced on the court’s website, now rests in the hands of the country’s justice minister to determine Kwon’s destination for extradition.

Terra founder Do Kwon

Do Kwon, known for his role in the Terraform Labs saga, faced legal troubles after using forged passports. Montenegrin authorities, having arrested Kwon and his associate with counterfeit travel documents, have already handed Kwon a four-month prison sentence. Additional discoveries included a set of Belgian passports and electronic devices, which further complicated his case.

The development comes shortly after the Higher Court of Podgorica affirmed the guilty verdict issued by a lower court in June, stating that the four-month prison sentence is deemed adequate punishment for the crime committed.

Do Kwon, along with Terra executive Han Chang-Joon, was arrested in Montenegro in March for attempting to leave the country using fake Costa Rican passports. Kwon, who is the founder of Terraform Labs, testified that he believed the passports were legitimate​​​​.

Many enforcement authorities and financial regulators, as well as the Interpol, were already on the hunt for Kwon for his alleged involvement in the collapse of terraUSD (UST) stablecoin and the Terra ecosystem.

Montenegro is geographically located south of Serbia, which emerged over the last few months as a possible location for Do Kwon, who’s wanted in his native country on charges of manipulating the capital markets. Kwon, who has been on the run since May 2022, denies any wrongdoing as he alleges that capital-markets law doesn’t apply to crypto assets.

Despite Kwon consenting to be extradited to South Korea via an expedited process, it is ultimately up to Montenegro’s justice minister, given that multiple countries are seeking his extradition.

Kwon’s legal team has remained silent regarding the U.S. charges. However, a spokesperson from Terraform Labs said they plan to contest the U.S. charges, labeling them as “misguided” and “deeply flawed.”

As Kwon awaits the final word on his extradition, he is currently serving time at Spuž prison near Podgorica, a facility criticized for poor conditions. The extradition, if approved by the justice minister, will proceed after Kwon serves his sentence for the forged document offenses.

This development follows the cataclysmic $40 billion collapse of the Terra ecosystem in May 2022, which resulted in massive financial losses for investors and rippled across the cryptocurrency landscape. The legal outcome of this extradition could set a precedent for how international law treats cross-border cryptocurrency crimes.

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