Montenegro has officially extradited Do Kwon, the co-founder of Terraform Labs, to the United States. This decision concludes a year-long legal battle involving competing extradition requests from South Korea and the USA, ultimately resolved by Montenegro's Ministry of Justice.
The Extradition Details
On December 31, 2024, Montenegrin police handed over Do Kwon to FBI officers at Podgorica Airport. Prime Minister Milojko Spajić confirmed the transfer in a post on X, stating that Kwon would face charges in the United States. This decision follows Justice Minister Bojan Božović's rejection of South Korea's extradition request just days earlier.
Legal Battles and the Terra/Luna Collapse
Do Kwon's troubles began with the catastrophic collapse of the TerraUSD stablecoin and its sister token Luna in May 2022. Promoted as a groundbreaking financial tool, TerraUSD relied on an algorithmic mechanism critics deemed unstable. When its value plummeted, the interconnected Luna token also collapsed, wiping out $33.9 billion in market value.
Arrest and Prolonged Legal Saga
After months in hiding, Kwon was arrested in Montenegro in March 2023 while attempting to travel using falsified Costa Rican and Belgian passports. His arrest added document forgery to his growing list of legal issues. For over a year, Montenegrin courts deliberated on the case, with Kwon's legal team filing multiple appeals to delay the process. Ultimately, Montenegro prioritized the U.S. request, citing comprehensive criteria evaluated by the Department of Justice. In the U.S., Kwon faces eight felony charges, including securities fraud, wire fraud, and conspiracy. The Securities and Exchange Commission (SEC) has also filed civil charges against Kwon and Terraform Labs. In April 2024, the SEC found both guilty of fraud, imposing penalties of $4.5 billion.
The extradition of Do Kwon to the USA marks a significant step in international legal practice and underscores the commitments of countries to combat financial fraud in the global cryptocurrency industry.
