Justice Minister Andrej Milović of Montenegro is reportedly set to extradite Do Kwon, co-founder of Terraform Labs, to the United States instead of South Korea. Kwon had been awaiting extradition after being arrested in Montenegro in March and sentenced to four months in prison for using falsified travel documents. Facing charges in both the U.S. and South Korea for his alleged involvement in the collapse of Terraform Labs, Kwon will now be subject to extradition based on the decision of Montenegrin officials.
According to a Wall Street Journal report on December 7, citing sources familiar with the matter, Justice Minister Milović plans to fulfill the U.S. officials’ request for extradition. The announcement of this decision is expected to be made public “in a timely manner.”
If extradited to the U.S., Kwon will be confronted with eight charges, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation related to his tenure at Terra. In February, the U.S. Securities and Exchange Commission (SEC) also charged Kwon with “defrauding investors in crypto schemes.”
The collapse of Terraform Labs in May 2022 marked a significant event that initiated a downturn in the cryptocurrency market. Following the collapse, TerraUSD (UST) depegged from the U.S. dollar, leading to several firms, including Voyager Digital, BlockFi, Celsius Network, and FTX, filing for bankruptcy.
Before his arrest in Montenegro, Kwon’s whereabouts had been largely unknown, with speculations suggesting that the Terraform Labs co-founder had been based in Singapore. Despite facing officials in the United States first, legal experts have not ruled out the possibility of Kwon still being charged in South Korea. Kwon has consistently denied committing fraud.