Founder of Terraform Labs and Cryptocurrency Escapee, Do Kwon, To Be Extradited Back to South Korea

On Thursday, the Appellate Court in Montenegro issued a verdict that Terraform Labs’ co-founder, Do Kwon, is to be extradited back to South Korea. This decision follows a previous ruling by the High Court of Podgorica in April, which dismissed an application for his extradition to the U.S. The specific date for Kwon’s extradition to South Korea remains undecided.

This latest judicial finding on August 1 in Montenegro marks another chapter in the prolonged and complex legal struggles facing the fallen crypto entrepreneur. After a verdict in March by a Montenegro high court for Kwon’s return to South Korea, the supreme judicial authority overturned this resolution, rerouting the matter to a subordinate court in April.

The court declared on Thursday that “With no challenges against this particular verdict, the High Court in Podgorica’s decision becomes enforceable, specifically in the segment permitting extradition via an expedited process at South Korea’s behest,” according to an official release.

Terraform Labs, established in 2018, is infamous for erasing upwards of $40 billion in market capitalization, leading to a catastrophic downturn in the cryptocurrency sector in May 2022. Subsequent to this debacle, Terraform Labs pursued Chapter 11 bankruptcy in Delaware earlier this year.

Both the United States and South Korea have demanded Kwon’s extradition from Montenegro to stand trial following his apprehension at a Montenegrin airport with forged travel documents.

In February 2023, the U.S. Securities and Exchange Commission filed a lawsuit against Kwon and Terraform, accusing them of deceiving American investors who bought digital assets, TerraUSD and Luna. Concurrently, South Korea seeks Kwon for alleged fraud and financial offenses tied to the collapse of Terra USD and Luna in May 2022.

A statement in March from the U.S. Department of Justice highlighted ongoing efforts to secure Kwon’s extradition, aligning with applicable international, bilateral treaties, and Montenegrin legislation.

Consequently, it appears Kwon is poised to be repatriated to South Korea to face legal proceedings.

Kwon found himself under arrest in Montenegro during March 2023 for attempting to depart for Dubai with a counterfeit passport, leading to a four-month prison term. Despite being released on bail in March 2024, he remained detained until then.

In a move to resolve a civil securities fraud lawsuit, Kwon’s now insolvent enterprise concurred to settle nearly $4.5bn in penalties with the U.S. SEC, with Kwon personally contributing $204 million. Moreover, Terraform Labs concurred to cease operations. Recently, the company initiated a strategic sales process as part of its ongoing Chapter 11 proceedings, as announced last month.