Last updated on February 24th, 2025 at 06:19 am
Podgorica, Montenegro – Do Kwon, the South Korean cryptocurrency entrepreneur at the center of a massive financial scandal, was extradited to the United States on Tuesday. Kwon, founder of Terraform Labs, is accused of defrauding investors in a failed cryptocurrency venture that wiped out $40 billion. The Montenegrin Interior Ministry said that after lengthy legal proceedings, Kwon was transferred to the US law enforcement officers, among whom there are FBI representatives.
There, Kwon awaits trial on accusations of conspiracy to commit fraud; he was indicted for his connection to the collapses of TerraUSD and Luna-a stablecoin or ‘stablecoin-like’ cryptocurrency venture that collapsed earlier this year.
The collapse wiped out a worldwide phenomenon in the global crypto markets which witnessed a financial breakdown in May of 2022. Kwon had been absconding and had been able to evade custody for several months before being caught and extradited.
Legal Procedure and Controversy
Kwon was apprehended at Podgorica airport in March 2023, as he tried to leave the country to travel to Dubai. At the time of his arrest, he had a fake passport of Costa Rica. Since then, there have been serious legal tug-of-wars between courts on extradition proceedings. Last week, after extended court decisions, reversals, and reversals, Montenegro’s Justice Minister Bojan Bozovic ratified the move to extradite Kwon to the U.S.
Although the court ruled, Kwon’s Montenegrin legal team is ready to appeal the extradition ruling. They believe the extradition is contrary to European conventions on extradition and are planning to take the matter to the constitutional court of Montenegro and the European Court of Human Rights.
Crypto Industry and Legal Wrangles
Kwon’s arrest and the fall of Terraform Labs have been termed major incidents in the increased scrutiny of the crypto industry by global regulators. To most experts, TerraUSD and Luna’s failure resembles a pyramid scheme in which many investors lost their savings. Terraform Labs had touted the tokens as stable and insensitive to fluctuations; however, their failure led to a sharp drop in value and financial devastation for countless individuals.
Besides his U.S. criminal charges, Terraform Labs filed for bankruptcy protection in the United States in January 2023, hoping to restructure its operations as it battles multiple legal challenges.
The case marks a significant moment in the global crackdown on crypto fraud and illegal activities within the space, as governments and regulators seek to impose more stringent rules following high-profile scandals like the collapse of exchanges and other failed crypto ventures.
Reactions and Statements
Montenegrin Prime Minister Milojko Spajic commented on the extradition, calling it a demonstration of Montenegro’s commitment to upholding international justice. “This extradition demonstrates our unwavering commitment to international justice and the rule of law,” he said on X (formerly Twitter).
The U.S. government has not yet commented on Kwon’s extradition but has previously expressed its intentions to prosecute him for his role in the Terra/Luna collapse.
