Montenegro Approves Extradition Of Crypto Mogul Do Kwon

Do Kwon, linked to the $40 billion TerraUSD collapse, faces extradition to the US or South Korea on fraud charges.

What are the charges against Do Kwon in the TerraUSD case?

In a significant turn of events, Do Kwon, the central figure in the $40 billion TerraUSD crypto collapse, has been cleared for extradition by a Montenegrin court. Kwon, who has been embroiled in legal troubles following the catastrophic failure of the TerraUSD token, is now facing potential extradition to the United States or South Korea, where he is wanted on various fraud charges.

Kwon's case garnered international attention after he fled South Korea amid investigations into the collapse of TerraUSD and its sister token, LUNA, which precipitated a broad cryptocurrency market crash. His arrest in Montenegro came as he attempted to depart from Podgorica Airport using a forged Costa Rican passport, leading to a four-month prison sentence in the country.

Do Kwon could now be facing extradition to the United States or South Korea.
TerraUSD's Controversial Architect, Do Kwon (Photo: Picture Alliance)

Both the US and South Korea have lodged extradition requests for Kwon, with Montenegro's justice minister set to decide his fate. The Higher Court of Podgorica has confirmed the minister's role in this decision-making process. The US authorities' charges against Kwon include securities, commodities, and wire fraud, along with civil charges from the Securities and Exchange Commission related to cryptocurrency fraud.

The TerraUSD Collapse And Its Aftermath

Kwon's Terraform Labs operated the TerraUSD stablecoin, a digital token designed to bridge traditional and crypto markets with an innovative, algorithm-driven approach to maintaining its value. However, its failure not only led to Kwon's infamous status in the crypto industry but also intensified regulatory scrutiny on stablecoins.

Following TerraUSD's collapse, US Treasury Secretary Janet Yellen highlighted the rapid growth and associated risks of such financial products. South Korea, on its part, issued an arrest warrant for Kwon and revoked his passport, citing violations of capital market regulations.

The case of Do Kwon and the TerraUSD debacle remains a pivotal moment in the cryptocurrency landscape, illustrating the complexities and risks inherent in the sector. As Montenegro's justice ministry deliberates over the extradition, the crypto world watches closely, anticipating the next chapter in this unfolding saga.

Related: Luna-Related Lawsuit Could Jeopardize Galaxy Digital's NASDAQ Listing


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