Terraform Labs co-founder Do Kwon is set to be extradited to the United States to face fraud charges related to massive losses suffered by U.S. investors due to its algorithmic stablecoin collapse.
The High Court in Montenegro has opted to send Kwon to the U.S., turning down South Korea’s extradition request, as reported by the local news outlet Pobjeda.
This development follows Kwon’s arrest in Montenegro in March 2023 for attempting to leave the country with a fake passport. Initially, Kwon consented to extradition to South Korea, but a Podgorica court later ruled in favor of his extradition to the U.S. Moreover, Kwon faced a Montenegro court’s judgment in June, sentencing him to four months in prison for document forgery, a decision he unsuccessfully appealed.
The trial concerning these fraud allegations, initially scheduled for January 29, has been postponed to late March. This delay stems from Kwon’s legal team’s difficulties in securing his release from Montenegro.
Earlier this month, the Court of Appeals once again revoked the extradition of Do Kwon to South Korea or the United States. This decision follows an appeal by Kwon’s defense attorneys, marking the second time the court overturned the extradition decision initially made by the country’s High Court in December.
The legal proceedings against Kwon have been ongoing since last year. The SEC charged Terraform Labs and Kwon in February over the collapse of TerraUSD and Luna in May 2022, which led to the loss of $40 billion in investor wealth. South Korean prosecutors have levied similar charges against Kwon and Terra affiliates.
Do Kwon successfully appealed a prior extradition decision on December 14, challenging the High Court’s November 17 ruling that deemed the extradition requests legally valid. Following a reaffirmation of the extradition’s validity by the High Court on December 29, Kwon’s defense re-appealed in January.
The Appeals Court identified procedural flaws in the extradition request handling, notably the ambiguous order of arrival of the requests from South Korea and the U.S., as well as the High Court’s failure to provide clear reasons and facts in its decision.
