Montenegro approves US extradition for Do Kwon following the $40 billion TerraUSD and Luna token collapse.
Decision Finalized After Lengthy Legal Battle
South Korean crypto entrepreneur Do Kwon will be extradited to the US from Montenegro after an 18-month legal battle. Montenegro’s Justice Minister, Bojan Bozovic, announced the decision, stating the criteria favored the US extradition request.
Fraud Allegations and Investor Losses
Kwon, the co-founder of Terraform Labs, faces charges in the US for orchestrating a multi-billion dollar crypto asset securities fraud. The collapse of TerraUSD and Luna in May 2022 wiped out $40 billion in investor funds, destabilizing the global crypto market.
Interpol Red Notice and Arrest
Interpol issued a “red notice” for Kwon in September 2022. He fled Singapore to Serbia and was arrested in Montenegro in March 2023 while attempting to board a flight to Dubai using forged documents.
Legal Troubles in Multiple Jurisdictions
Kwon’s extradition follows Montenegro’s sentencing of him to four months in prison for document forgery. Terraform Labs’ former finance officer, Hon Chang-joon, was previously extradited to South Korea.
US SEC Charges Against Kwon
In February, the US Securities and Exchange Commission (SEC) charged Kwon and Terraform Labs with securities fraud, alleging they misled investors about TerraUSD’s stability and Luna’s value. SEC Chairman Gary Gensler criticized the lack of transparency, saying, “Terraform and Do Kwon failed to provide full, fair, and truthful disclosure.”
Ripple Effect on Crypto Markets
The TerraUSD and Luna collapse in 2022 triggered a significant sell-off across major cryptocurrencies, including Bitcoin, exposing vulnerabilities in the crypto ecosystem.
Broader Implications for Crypto Regulation
Kwon’s extradition highlights increased global scrutiny of cryptocurrency fraud and emphasizes the importance of regulatory compliance to protect investors.
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