Terraform co-founder Do Kwon to be extradited to South Korea

A Montenegro court decided on Thursday that Do Kwon, co-founder of Terraform Labs, will be extradited to South Korea instead of the United States, as previously sought.

The High Court in Podgorica overturned a prior ruling to extradite Kwon to the U.S., citing procedural violations.

South Korea had initially requested Kwon’s extradition in March 2023, where he could faces a 40-year prison sentence, leading to a legal battle between the two countries.

Kwon, facing fraud charges related to the collapse of the Terra ecosystem, was arrested in Montenegro in March 2023 while attempting to travel to Dubai using a fake passport. The Wall Street Journal reported that a tipster had alerted Montenegrin authorities about Kwon’s presence. Despite expressing a preference for extradition to South Korea to be closer to his family, Kwon’s lawyers questioned the validity of the extradition treaty with the U.S.

His extradition is still subject to appeal, and his lawyers requested delaying his trial in the U.S., which is also sought by the U.S. Securities and Exchange Commission (SEC). Terraform Labs, led by Kwon, filed for Chapter 11 bankruptcy in January amid the collapse of the Terra stablecoin and LUNA governance token. Kwon and Han Chang-joon, Terraform Labs’ CFO, were arrested together, with Han extradited to South Korea in February.

Despite the legal challenges, Kwon had maintained a social media presence with over a million followers, and he and Han reportedly lived in Serbia after leaving South Korea.

The case will now be returned to the first-instance court for reconsideration, marking another twist in the prolonged extradition process. Last week, it was reported that Kwon is likely to miss the start of his U.S. Securities and Exchange Commission fraud trial on March 25 due to delays in his extradition proceedings.

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, which led to the loss of $40 billion in investor wealth. South Korean prosecutors have levied similar charges against Kwon and Terra affiliates.