Do Kwon Extradited to US from Montenegro
After months of legal proceedings, Do Kwon, the South Korean co-founder of Terraform Labs, has been extradited from Montenegro to the US. Local media reports confirmed that Montenegrin police transferred Kwon to US authorities at Podgorica International Airport on Dec. 31.
Charges Stemming from TerraLUNA Collapse
- Kwon is set to face charges related to the 2022 collapse of the TerraLUNA ecosystem, which resulted in a loss of approximately $40 billion from the market.
- He was initially arrested in March 2023 in Montenegro for attempting to travel with a fake passport.
- Despite seeking repatriation to South Korea, Kwon’s appeals were denied by Montenegro’s judiciary.
TerraLUNA Collapse Details
The collapse of TerraUSD, a stablecoin designed to maintain parity with the US dollar, led to a sharp de-pegging, causing over $40 billion in market value to be wiped out. This event left thousands of investors with significant losses and triggered regulatory scrutiny and fraud allegations.
Kwon’s Involvement in Terraform Labs
- Kwon co-founded Terraform Labs in 2018 and promoted TerraUSD as a revolutionary decentralized financial tool.
- Critics warned that the algorithmic model supporting TerraUSD’s stability was unsustainable.
- The crash of TerraUSD’s value also led to a decline in Luna’s market value by an estimated $33.9 billion.
Arrest and Legal Troubles
Interpol issued a red notice for Kwon in September 2022, marking him as a high-priority international fugitive. Kwon was apprehended in Montenegro after allegedly traveling between multiple countries. During his arrest, police discovered falsified Costa Rican and Belgian passports in his possession.
Upcoming Trial in the US
- Kwon is expected to face trial in the US for securities fraud, wire fraud, and conspiracy related to the collapse of Terraform Labs’ cryptocurrencies.
- His case highlights the risks and regulatory challenges in the crypto industry and has prompted calls for tighter oversight of digital assets.
The extradition of Do Kwon signifies a new phase in holding individuals accountable within the crypto sector. His trial in the US is anticipated to shed light on his role in one of the largest financial collapses in crypto history.
