Montenegro court rules to extradite Terraform Labs founder to the US. An appeal is pending

PODGORICA, Montenegro (AP) — A court in Montenegro has ruled that Terraform Labs founder Do Kwon should be extradited to the United States to face fraud charges rather than to his native South Korea, a court official in the Balkan Country said Thursday.

Kwon, 32, was arrested nearly a year ago in Montenegro on an international arrest warrant in connection with a $40 billion crash of Terraform Labs’ cryptocurrency, which devastated retail investors around the world. Both South Korea and the U.S. have requested Kwon’s extradition from Montenegro.

High Court spokeswoman Marija Rakovic said Kwon’s lawyers have three days to appeal the ruling.

“The High Court made two decisions, one on the extradition of Do Kwon to the U.S., and the other rejecting South Korea’s request on the same grounds,” she told The Associated Press. “The Court of Appeal will decide on both decisions of the High Court,”

Kwon, known as “the cryptocurrency king,” is wanted by the U.S. where he was charged with fraud by federal prosecutors in New York. South Korean prosecutors have also sought his extradition.

Kwon and another South Korean were arrested at Montenegro’s Podgorica Airport on March 23 last year while trying to depart for Dubai using fake Costa Rican passports. Kwon and five others connected to Terraform were wanted because of allegations of fraud and financial crimes in relation to the implosion of its digital currencies in May 2022.

TerraUSD was designed as a “stablecoin,” a currency which is pegged to stable assets like the dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg.

Kwon is currently serving a four-month prison sentence in Montenegro for using the fake passport.