Crypto King Do Kwon to be Extradited to the U.S. Over TerraUSD and Luna Collapse

Do Kwon to Be Extradited to the U.S. as Legal Battles Conclude in Montenegro

South Korean cryptocurrency entrepreneur Do Kwon is set to be extradited to the United States from Montenegro following a protracted legal battle surrounding the collapse of digital tokens TerraUSD and Luna. Kwon, who has been sought by authorities in both the U.S. and South Korea for months, is facing allegations of fraud linked to the failure of the company behind these tokens, which wiped out approximately $40 billion (£31.7 billion) in investor value and sent shockwaves through the global cryptocurrency market.

Montenegro, which does not have formal extradition agreements with either the U.S. or South Korea, required extensive court proceedings to resolve the extradition matter. The Ministry of Justice of Montenegro announced that Minister Bojan Bozovic granted approval for Kwon’s extradition, citing that most legal criteria supported the U.S. authorities’ request.

Kwon has agreed to be extradited to both the U.S. and South Korea amid ongoing legal scrutiny. In February, the U.S. Securities and Exchange Commission (SEC) charged Kwon and Terraform Labs for allegedly orchestrating a multi-billion dollar securities fraud involving crypto assets. SEC Chairman Gary Gensler stated that Kwon and his associates failed to provide investors with complete and truthful information, particularly concerning the purported stability and growth prospects of TerraUSD.

The collapse of TerraUSD and Luna tokens in May 2022 instigated a massive sell-off of other prominent cryptocurrencies, including Bitcoin. Following the incident, Interpol issued a “red notice” for Kwon’s arrest in September 2022.

Kwon was taken into custody in March 2023 while attempting to board a flight to Dubai at Podgorica Airport, Montenegro’s capital, after evading authorities since the crisis began. In June 2023, he received a four-month prison sentence in Montenegro for offenses related to falsifying official documents.

Meanwhile, Hon Chang-joon, a former finance officer at Terraform Labs, was extradited to South Korea in February, having served four months in prison in Montenegro on fraud-related charges.