Terraform Labs Founder Do Kwon Will be Extradited to the United States

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As a seasoned crypto investor who has weathered numerous market ups and downs, I can’t help but feel a mix of emotions upon hearing the news that Do Kwon is likely to face trial in the US. The TerraUSD and Luna collapse was undoubtedly one of the most significant events in recent cryptocurrency history, leaving many investors like me with substantial losses.

Reports from the locale indicate that Montenegro’s Minister of Justice has issued an order for the extradition of Terraform Labs founder Do Kwon to the U.S., overruling South Korea’s demand for his extradition. The South Korean authorities allege that Kwon deceived investors and hid assets.

This decision is based on a Supreme Court verdict in Montenegro, which established that the necessary conditions for extradition had been met.

Do Kwon To Face Trial in the US

This past week, it was reported by BeInCrypto that the US may exercise extradition following Montenegro’s court decision to reject Do Kwon’s appeal, pointing out technicalities in his case as the reason for their ruling.

Although a definite extradition date for Kwon hasn’t been set, it appears that he may soon stand trial in a manner similar to Sam Bankman-Fried. The founder of FTX is currently serving a 25-year prison term and was also extradited from the Bahamas. However, Bankman-Fried’s extradition process was less complex than what Kwon is experiencing.

In a statement, the Ministry of Justice explained that after considering the Supreme Court’s decision and examining all relevant factors like the nature and gravity of the alleged crimes, where they were committed, the nationality of the individual involved, as well as additional circumstances, it determined that most legal requirements support the extradition request made by the U.S. authorities.

Investigators are looking into the activities of the person who founded Terraform Labs, as he’s suspected to have played a part in the significant crash of a cryptocurrency that occurred in May 2022, not just in the United States, but also in South Korea.

During that period, the collapse of TerraUSD and Luna resulted in a loss of approximately $40 billion across the crypto market, causing a ripple effect with far-reaching financial consequences. Consequently, numerous businesses in the sector found themselves filing for bankruptcy.

Additionally, it’s claimed that Kwon misled investors and may have hidden substantial wealth. In March 2023, Kwon and his associate Han Chong Jun were apprehended at Podgorica Airport in Montenegro as they tried to fly to Dubai with forged travel documents.

In Montenegro, Kwon received a sentence of four months in prison. Nevertheless, he’s presently being held at the Spuž Center for Foreigner Reception instead.

Historic Settlement with the SEC

In June 2024, Terraform Labs entered into an unprecedented agreement with the SEC, consenting to pay a total of $4.47 billion in fines. This amount consisted of $3.6 billion in disgorgement fees, a $420 million civil fine, and $467 million in pre-judgment interest.

Furthermore, Kwon was instructed to make a personal payment exceeding $200 million. This total includes a sum of $110 million as restitution (disgorgement), $80 million in fines (civil penalties), and an additional $14.3 million for accrued interest.

There’s been a stir over the allegations about Kwon’s potential political associations in Montenegro. It’s been hinted that he might have monetary dealings with local political figures, such as Milojko Spajic, head of the Europe Now party.

All told, these links have sparked worries over possible meddling in the extradition proceedings. In 2023, Montenegro’s prime minister requested an inquiry into these allegations, thus increasing the intricacy of this situation.

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2024-12-27 18:37