On December 27, Montenegro confirmed it would extradite South Korean cryptocurrency entrepreneur Do Kwon to the United States. This decision concludes months of legal disputes between the U.S. and South Korea. Both countries sought Kwon’s extradition over the $60 billion collapse of the Terra-Luna blockchain.
Legal Disputes and Extradition Battle
The extradition case sparked a long legal battle. South Korea and the U.S. both aimed to bring Kwon to justice. Kwon’s role in the 2022 Terra-Luna collapse led to massive financial losses. Firms like Three Arrows Capital, BlockFi, and FTX filed for bankruptcy. The collapse destroyed billions in investments.
Global investigators soon probed Kwon’s involvement, and he became a fugitive. Even after Interpol issued a Red Notice, he managed to evade capture. Kwon first fled to Serbia, then moved to Montenegro.
Kwon’s Arrest and Legal Proceedings
In March 2023, authorities arrested Kwon and former Terraform Labs finance officer Han Chang-joon at Podgorica Airport. They attempted to board a flight to Dubai using fake Costa Rican documents. After their arrest, they spent four months in a Montenegrin jail while the U.S. and South Korea vied for their extradition.
Kwon’s legal team, led by Balkan attorney Goran Rodić, contested each decision. However, earlier this week, Montenegro’s Constitutional Court rejected an appeal from Kwon’s lawyers. This cleared the way for the Justice Ministry’s final ruling. Montenegro’s Supreme Court had already ruled that Kwon met the criteria for extradition to both South Korea and the U.S.
The U.S. Extradition Takes Precedence
On December 27, Montenegro’s Justice Minister Bojan Bozovic announced that the U.S. request would take priority. The Ministry stated, “The majority of the criteria favor the U.S. extradition request.” This decision rejected South Korea’s extradition request for Kwon.
Earlier in 2024, Montenegro deported Kwon’s business partner, J.C.H., to South Korea. This further emphasized Montenegro’s stance on the matter.
The Rise and Fall of Do Kwon
Terraform Labs once gained significant attention. Kwon was hailed as a genius in South Korea for developing TerraUSD and Luna. However, in May 2022, both tokens collapsed in a financial “death spiral.” The failure led to enormous losses for investors, sparking accusations of a Ponzi scheme against Terraform Labs.
In early 2023, Terraform Labs filed for U.S. bankruptcy protection. U.S. prosecutors are pursuing additional criminal charges. In South Korea, Kwon faces up to 40 years in prison if convicted of violating financial laws.
Ongoing Legal Challenges for Kwon
Kwon’s legal battles are far from over. The Terra-Luna collapse remains a pivotal moment in cryptocurrency history. The case continues to unfold with both legal and financial implications for the global crypto industry.
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