Montenegro Approves Extradition of Do Kwon to United States
Montenegro’s Minister of Justice, Bojan Božović, signed the order to extradite Do Kwon, founder of Terraform Labs, to the United States, concluding months of legal deliberation. The Supreme Court of Montenegro confirmed that both the US and South Korea met legal requirements for extradition.
The decision considered factors such as the severity of charges, the sequence of requests, and broader legal considerations. The US request took precedence as it was submitted first and included significant allegations of financial fraud and market manipulation. The Ministry of Justice stated that most criteria favored the US extradition request.
“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.
Transfer Timeline for Do Kwon
Do Kwon is currently detained at Montenegro’s Reception Center for Foreigners and is expected to be transferred to the United States in the coming weeks. Arrangements for the extradition are underway, ensuring a smooth handover to American law enforcement. His extradition is part of efforts to hold him accountable for his alleged role in the collapse of the Terra-LUNA ecosystem, which resulted in billions in investor losses.
As a South Korean citizen, Kwon faces additional criminal charges in South Korea related to violating capital markets law and committing financial fraud.
Do Kwon’s Role in the Terra-LUNA Collapse
In May 2022, the crypto market experienced a significant downturn due to the collapse of Terraform Labs’ tokens, TerraUSD (UST) and LUNA. TerraUSD, marketed as a stablecoin, failed to maintain its 1:1 peg to the US dollar, leading to a loss of $40 billion in market value and causing bankruptcies among several digital asset companies, including Celsius.
Kwon and Terraform Labs are accused of misleading investors about the stability of the Terra-LUNA ecosystem. Prosecutors allege that Kwon manipulated market data and concealed critical risks associated with the tokens while hiding substantial wealth to evade legal liabilities.
Capture Events Leading to Kwon’s Arrest
Following the Terra-LUNA crash, Kwon went into hiding, evading authorities in South Korea and Singapore. In September 2022, South Korean prosecutors issued an arrest warrant for him while he was believed to be in Singapore. Interpol subsequently issued a Red Notice, classifying him as a fugitive wanted worldwide.
Kwon's evasion ended on March 23, 2023, when he and his business partner, Han Cheng Jun, were arrested at Podgorica Airport in Montenegro while attempting to board a flight to Dubai using forged passports. Following his arrest, Kwon received a four-month prison sentence for passport forgery, further delaying extradition proceedings.