A Montenegro court has approved the extradition of Do Kwon, founder of the failed cryptocurrency Terra, to either South Korea or the United States once he finishes serving a four-month prison sentence in Montenegro. The final extradition decision will be made by Montenegro’s Justice Minister.
Kwon was arrested in March at Podgorica Airport in the capital city of Montenegro for using falsified documents. He faces fraud charges in both South Korea and the U.S. related to the collapse in May 2022 of TerraUSD, a stablecoin he created that was supposedly pegged to the U.S. dollar.
- Early in November, the High Court of Montenegro affirmed Kwon and an associate’s four-month prison sentence for document falsification.
- In the U.S., Kwon faces federal charges of conspiracy and fraud in relation to the TerraUSD collapse.
- In South Korea, prosecutors have an ongoing investigation into Terraform Labs and froze $185 million in assets belonging to Terra co-founder Daniel Shin.
Do Kwon’s Terra was a billion-dollar collapse
The TerraUSD stablecoin collapse caused over $40 billion in investor losses when its peg to the U.S. dollar failed in May 2022. The failure set off a chain reaction that severely damaged confidence in cryptocurrencies.
Terraform Labs, the company behind TerraUSD and its sister token Luna, is facing lawsuits and investigations globally. The tokens lost nearly all their value in a matter of days.
With prison time pending in Montenegro, it remains unclear whether Kwon will stand trial in the U.S. or be extradited to South Korea.
Prosecutors in both countries appear determined to hold him legally accountable for the major losses suffered by TerraUSD and Luna investors around the world.