Former Terraform Labs CEO Faces Extradition to the U.S.

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Key takeaways: 

  • Do Kwon, the former CEO of Terraform Labs, is set to be extradited to the United States to face criminal charges
  • The potential extradition adds another layer to the legal challenges faced by Kwon

In a recent development reported by the Wall Street Journal, former Terraform Labs CEO Do Kwon might be on his way to the United States, bypassing extradition to South Korea, where he is facing charges in both countries.

Kwon has been held in custody in Montenegro since March on allegations of falsifying travel documents and was sentenced to four months in prison in June.

The Montenegro court approved Kwon’s extradition last month, with the initial part of his sentence set to be served for document forgery in Montenegro. This came after authorities caught him attempting to leave the country using a false passport.

The South Korean national is under indictment in both his home country and the United States following the collapse of Terra’s algorithmic stablecoin, TerraUSD (UST), and the platform’s native asset, LUNA.

The downfall of these two cryptocurrencies resulted in significant losses across the crypto market in a matter of days, triggering a market contagion that has had lasting effects on the industry.

Montenegro’s senior official plans to extradite Kwon to the U.S. to face criminal charges related to the collapse of TerraUSD (UST) stablecoin and Luna (LUNA) token, according to sources cited by the Wall Street Journal.

The blowups of UST and LUNA, both created by Kwon, fueled a crisis that reverberated throughout the crypto industry in 2022.

Following the court’s approval of Kwon’s extradition in Montenegro last month, sources revealed that Justice Minister Andrej Milovic is yet to disclose his decision on the extradition location.

Allegedly, Milovic informed the U.S. ambassador to Montenegro, Judy Rising Reink, of his intention to send Kwon to the United States. However, Milovic has refrained from commenting on the matter, stating only that “the public will be informed of the decision in a timely manner.”

Goran Rodic, Kwon’s Montenegrin lawyer, stopped short of confirming the decision but acknowledged the possibility. South Korean investigative team leader Dan Sung-han emphasized the efficiency of investigating the case in South Korea for the sake of justice for investors. Sung-han added that Kwon could potentially face the longest jail term for a financial crime in South Korea’s history.

At present, Kwon’s primary concern lies with U.S. prosecutors. Last month, his attempt to appeal the document forgery case was rejected by a High Court in Montenegro. Deemed a flight risk, the disgraced crypto founder is currently housed at Spuž Prison near the capital city of Podgorica.

Milovic is expected to delay announcing his decision until it is confirmed that Kwon will not attempt a final appeal. The unfolding events around Kwon’s extradition add another chapter to the controversial saga of Terra’s collapse and its impact on the cryptocurrency market.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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