Do Kwon Faces Extradition to South Korea, Not United States, Montenegrin Court Rules

• Montenegro Appellate Court upholds ruling for Do Kwon’s extradition.
• Terra-Luna collapse leads to over $40 billion in investor losses.
• Competing demands from the US and South Korea for Kwon’s extradition.

The downfall of TerraUSD (UST), an algorithmic stablecoin, and its sister token, LUNA, resulted in losses exceeding $40 billion for investors. This event prompted legal action against Do Kwon , co-founder of Terraform Labs, who fled his native South Korea. 

After Do Kwon was apprehended in Montenegro, both South Korea and the United States filed extradition requests. Recently, the Montenegro Appellate Court upheld a ruling to extradite Kwon to South Korea, despite competing claims from the United States.

South Korea Wins Extradition Battle for Do Kwon

The Terra-Luna criminal case is slowly coming to a conclusion. On Thursday, August 1, the Montenegro Appellate Court upheld a ruling that Terraform Labs co-founder Do Kwon should be extradited to South Korea, despite competing requests from the United States. 

This ruling followed an initial court decision from December 2023, which stated Kwon met the legal prerequisites for extradition to both countries. However, the appellate court found that the first court had not properly established the order of the extradition requests, which is crucial in deciding which country takes precedence​. 

Despite Kwon’s consent to be extradited to South Korea, the court decided to proceed with a formal ruling to ensure all legal bases were covered. The final decision favored South Korea due to the earlier submission of their request, which was a decisive factor according to the Appellate Court. Kwon remains in Montenegro as the legal processes continue. 

Do Kwon’s Legal Troubles

Kwon’s troubles began in March 2023, when he was apprehended at the Podgorica airport in Montenegro. Alongside his business partner, Chang Joon, he attempted to board a flight to Dubai using falsified passports, resulting in a four-month prison sentence for both. Following their sentences, Chang Joon was extradited to South Korea on February 5, 2024.

The U.S. Securities and Exchange Commission (SEC) also charged Kwon and Terraform Labs with fraud in March 2023. This ran on the claim that they had misrepresented the stability of the TerraUSD (UST) stablecoin and its integration with a Korean mobile payment application.

In the United States, legal actions against Kwon have been ongoing. In April 2024, a New York jury found Kwon and his company, Terraform Labs, liable for civil fraud. This verdict aligned with the SEC’s accusations that they had misled investors, causing losses estimated at $40 billion. Despite a $4.5 billion settlement agreement between Terraform Labs and the SEC, the US continued to press for Kwon’s extradition.

On the Flipside

• The United States plans to contest the extradition ruling, indicating ongoing legal battles. 
• There is a possibility that Do Kwon could face multiple sentences in different jurisdictions.

Why This Matters

The outcome of this case could influence how investors perceive the risk associated with crypto investments, with the successful prosecution of fraudsters boosting investor confidence. 

Read more about the Terra-Luna collapse: 
The Collapse of LUNA: What Happened and Why?

Read more about the risk of short selling memecoins: 
Short Selling Solana Meme Coins Can Wipe You Out: Here Are The Risks