Topline
Do Kwon, the former CEO of cryptocurrency startup Terraform Labs, will reportedly be extradited to face fraud charges in the United States—over a year after his tokens collapsed and wiped out $40 billion in value.
Key Facts
Kwon is currently serving a prison sentence of four months in Montenegro for possession of forged passports.
Kwon’s extradition was approved by a court in Montenegro on Nov. 24, but it was unclear if he would be handed over to the U.S. or South Korea, where he is also facing fraud charges.
Key Background
Kwon, 32, founded Terraform Labs in 2018, which managed multiple cryptocurrency tokens including Terra and Luna. Terra, a so-called algorithmic stablecoin, was pegged to the U.S. dollar. According to the Securities and Exchange Commission, Kwon and his company repeatedly lied to investors about both coins, at one point promising investors a remarkable 20% interest rate. In May 2022, Terra depegged from the dollar and its value plummeted to close to zero—wiping out about $40 billion in value. Kwon was charged with securities fraud, wire fraud and commodities fraud by the SEC in February 2023. Kwon denied any wrongdoing, but soon disappeared from his apartment in Singapore. He was arrested at the Podgorica Airport in March 2023, where he was attempting to board a flight to Dubai using forged Costa Rican documentation. He was placed on house arrest until a court decided on his extradition.
What To Watch For
Montenegrin Justice Minister Andrej Milovic will make a formal decision on the extradition on Dec. 20. He has told individuals, including U.S. Ambassador to Montenegro Judy Rising Reinke, his decision to send Kwon to the U.S. in closed-door meetings, according to the Journal.
