In a landmark move shaking the cryptocurrency world, South Korean crypto tycoon, Do Kwon, is set to be extradited from Montenegro to the United States due to the failure of two of his digital tokens – TerraUSD and Luna. The incident, attributed to alleged fraudulent activities, drowned a whopping $40bn from investors, stirring waves in the global cryptocurrency markets. The legal tug of war over Kwon’s extradition between the US, South Korea, and Montenegro has been ongoing for over a year and a half.
The Ministry of Justice in Montenegro announced the decision in a statement. The approval came because it was found that “the majority of the criteria prescribed by law favor the extradition request from the competent authorities of the United States of America.” Interestingly, Kwon had consented to his extradition initially.
In early 2022, American regulators accused Kwon and Terraform Labs, his company, of fostering a multi-billion-dollar crypto asset securities fraud. According to Gary Gensler, the US Securities and Exchange Commission (SEC) chairman, Kwon didn’t abide by the requirement of providing fair, truthful, and comprehensive disclosure for several crypto asset securities, particularly Luna and TerraUSD. The US authorities claimed Kwon constantly asserted that his tokens’ value would surge and also fooled investors about TerraUSD’s stability.
However, their value plummeted in May 2022, inciting a major sell-off in other significant cryptocurrencies, including Bitcoin. After fleeing to Serbia from Singapore following this debacle, Kwon was arrested in Montenegro in 2023 before boarding a Dubai-bound flight. Following a conviction for document forgery, Kwon served a four-month sentence in a Montenegro jail. His associate and Terraform Labs’ ex-finance officer, Hon Chang-joon, was already sent to South Korea post a fraud-related jail term in Montenegro.