Do Kwon, the founder of Terraform Labs may soon be extradited to the United States according to the Wall Street Journal. Montenegro is reportedly preparing his extradition to the US, where he is facing allegations, as opposed to South Korea, where he is also wanted on charges.
Kwon has been in custody in Montenegro since March following accusations of falsification of travel documents. In June, Kwon was sentenced to a four-month prison term. He also has an ongoing case with the US Securities and Exchange Commission (SEC), who claim both Kwon and Terraform Labs offered and sold unregistered securities. Simultaneously, Kwon faces charges of fraud and infringements of capital market laws in South Korea.
The investigations into Kwon and Terraform Labs were triggered following the collapse of the algorithmic stablecoin TerraUSD (UST). The failure of UST precipitated a $40 billion dive in the cryptocurrency market, leading to the bankruptcy of several lenders exposed to UST, including Celsius and Voyager.
Kwon unsuccessfully attempted to appeal the extradition order, which was approved by a Montenegrin court last month. Justice Minister Andrej Milovic will decide on Kwon’s extradition location. As for the US case, the main point of contention is whether the tokens allegedly offered by Do Kwon were indeed securities as asserted by the SEC. The regulator is hoping for a summary judgment by Judge Jed Rakoff.