Do Kwon to Be Extradited to U.S. Over TerraUSD Collapse, Montenegro Court Rules

In a recent development reported by the Wall Street Journal on February 22, 2024, the court in Montenegro has ruled that the infamous cryptocurrency entrepreneur Do Kwon should be extradited to the U.S. to face trial on fraud charges, rejecting his native South Korea as the extradition location.

The High Court in Podgorica, Montenegro, delivered a ruling compelling Do Kwon’s extradition to the U.S., a decision now subject to a three-day appeal period by Kwon’s legal team. This ruling follows Kwon’s arrest in March 2023 at the Podgorica airport, attempting to board a private jet to Dubai with a fake Costa Rican passport.

The U.S. Department of Justice charged Do Kwon with eight criminal counts of fraud, alleging that he misrepresented and misled investors into believing TerraUSD’s stability. The Securities and Exchange Commission also filed a civil case against Do Kwon and Terraform Labs over securities fraud related to the collapse. 

In addition to U.S. charges, South Korean prosecutors have sought Kwon for alleged violations of the country’s capital markets laws. Kwon’s arrest warrant in South Korea dates back to September 2022.

The Montenegrin court’s decision potentially positions Kwon to face the SEC’s fraud lawsuit, with the trial set to commence on March 25.

A related development took place two weeks ago, on February 5, such that Han Chang-joon, former CFO of Terraform Labs, along with Do Kwon, was extradited to South Korea by Montenegrin authorities. Arrested in March 2023, they received a four-month sentence in Montenegro. Han Chang-joon now faces potential life imprisonment in South Korea. 

Both the U.S. and South Korea seek Kwon’s prosecution for charges linked to the May 2022 collapse of TerraUSD and Luna, causing a staggering $40 billion loss in the crypto market, impacting investors and traders globally. Kwon, who created TerraUSD and Luna, faces eight criminal counts of fraud, as detailed by federal prosecutors in New York. 

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