Do Kwon, the former CEO of cryptocurrency startup Terraform Labs, is reportedly facing extradition to the United States to face fraud charges. Kwon has been imprisoned in Montenegro since March, and Montenegro’s Justice Minister Andrej Milovic is expected to make a formal decision on the extradition on December 20.
Kwon’s extradition has been the subject of an international tug-of-war between the U.S. and South Korea, both of which seek to try him for fraud and securities-law violations. The crypto entrepreneur is a South Korean citizen, but a Montenegro court approved his extradition last month, leaving the final decision to Justice Minister Milovic.
The collapse of TerraUSD and Luna tokens had far-reaching consequences, causing losses in the crypto industry. Kwon’s extradition to the U.S. would mean facing criminal charges related to the collapse of these stablecoins and tokens. The decision is pending while Kwon appeals the court ruling in Montenegro.
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.
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.
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.