Montenegro extradites South Korean crypto founder to the US over $40 billion fraud

Dec 31, 2024 - Montenegro has extradited South Korean crypto entrepreneur Hyeong Do Kwon to the United States, where he is accused of orchestrating a multi-billion dollar cryptocurrency fraud. Kwon, known for his role in Terraform Labs, was arrested in March 2023 in Montenegro while trying to board a private flight to Dubai with falsified documents.

Kwon, often referred to as the "crypto king," is at the centre of a scandal involving a $40 billion fraud linked to the collapse of the TerraUSD stablecoin and its sister token, Luna. His arrest sparked an international legal battle, with both the United States and South Korea seeking his extradition.

Extradition process

On December 31, Montenegro’s Police Directorate confirmed the extradition, with Kwon being handed over at Podgorica Airport. The police statement read, “Officers of NCB Interpol Podgorica, with the support of the Special Police Unit, extradited the South Korean national DHK, who was wanted by two countries, namely South Korea and the United States of America.”

Montenegrin courts had issued conflicting rulings on the matter, with the final decision resting with the country’s justice ministry. In a statement, Justice Minister Bojan Bozović said the decision to send Kwon to the US was based on factors such as the severity of the charges, the location of the crimes, and the order in which the extradition requests were made.

Legal challenges

The extradition followed months of legal back-and-forth. In September, Montenegro’s Supreme Court ruled that Kwon could be sent either to the US or South Korea. A final decision was delayed until late December when Kwon lost his final appeal to prevent extradition.

In a high-profile civil case in the United States, Kwon and Terraform Labs were found liable for misleading investors. A jury in New York in April agreed with the US Securities and Exchange Commission (SEC), which claimed the pair had engaged in fraud. Terraform Labs later settled for $4.5 billion, while Kwon was ordered to pay $204 million.

Kwon has denied the charges, claiming that the accusations in South Korea were politically motivated.

Impact on the crypto world

The case continues to raise questions about accountability in the fast-evolving world of cryptocurrency. With Kwon now facing trial in the United States, many in the crypto industry will be watching closely to see how the legal system handles such large-scale fraud cases.