The High Court of Montenegro ruled that former cryptocurrency tycoon Do Kwon ought to be sent to his home country of South Korea, not the United States so that he can face charges related to the $40 billion crash of the TerraUSD stablecoin in 2022.
It’s the most recent development in the co-founder of Terraform Labs Pte’s legal ordeal. For months before his arrest in March 2023 in Montenegro for using a forged passport, he was on the run from allegations stemming from South Korea. Prosecutors in Seoul and New York launched competing extradition demands in response to Kwon’s arrest.
Kwon’s legal victory opens the possibility of him choosing to travel to South Korea, where penalties for white-collar offences are less severe than in the US. Meanwhile, fellow crypto tycoon Sam Bankman-Fried faces potential decades in prison after being found guilty of fraud in New York.
The US attorney’s office in Manhattan brought charges against the co-founder of FTX and indicted Kwon on fraud-related offences.
The legal outcome remains uncertain as a Montenegrin court overturned its decision to send Kwon to the US. However, Kwon could still face extradition if prosecutors appeal. His lawyer suggests extradition might proceed after he completes his sentence on passport charges this month.
However, the tiny Balkan country, a member of NATO, finds itself in a geopolitical situation that favours extradition to the US, and the government is probably considering steps to make sure that happens.
Han Chang-joon, the chief financial officer of Terraform, was extradited to South Korea last month after being detained alongside Kwon in Montenegro.
Terra’s collapse triggered a market downturn affecting players like FTX. Designed for stability, Terra and its token Luna suffered when confidence waned in Kwon’s project in May 2022.
Losses sparked outrage in South Korea, leading to charges against Kwon. Manhattan prosecutors accused him of misleading investors about Terra’s technology. Even if extradited, Kwon could face trial in New York first, with the US potentially seizing assets worldwide.
Also Read: Terra’s Do Kwon Wins Crucial Appeal, Montenegro Rethinks Extradition
