Montenegro Approves Do Kwon’s Extradition to the U.S

The Justice Minister of Montenegro has signed an order for the extradition of Terraform Labs co-founder Do Kwon to the United States. This decision marks a pivotal moment in the ongoing legal battles surrounding the $60 billion Terra-Luna collapse, which left a trail of financial devastation in the cryptocurrency market.

Both the United States and South Korea have pursued Kwon's extradition following extensive investigations into his role in the Terra blockchain implosion. The 2022 collapse not only obliterated Terra's ecosystem but also triggered a domino effect, leading to the bankruptcy of over-leveraged crypto businesses such as Three Arrows Capital, BlockFi, and even FTX.

While South Korea, Kwon's home country, has sought his extradition to face charges under its financial market laws, the Montenegrin Justice Minister opted to hand him over to U.S. authorities. Local media reports indicate this decision follows months of legal wrangling between the two governments, each seeking to prosecute Kwon for his alleged involvement in one of the largest financial collapses in cryptocurrency history.

Do Kwon’s Terra blockchain, once a prominent player in the cryptocurrency space, disintegrated in 2022, wiping out billions of dollars in investor value. The collapse of its algorithmic stablecoin and related tokens led to a cascading financial crisis across the crypto market, leaving numerous firms insolvent.

Amid mounting scrutiny, Kwon fled the scene, evading law enforcement as the global crypto market spiralled into chaos. Interpol issued a Red Notice for his arrest, and Kwon reportedly sought refuge in Serbia before crossing into Montenegro. In March 2023, he was apprehended at the Podgorica airport alongside Terraform Labs’ former finance officer, Han Chang-joon. The pair were accused of attempting to fly to Dubai using forged passports.

Montenegro Legal Battles as U.S. Prosecution Nears

Following their arrest, Kwon and Chang-joon were detained for four months while legal proceedings unfolded in Montenegro. Courts in the Balkan nation overturned extradition orders multiple times, reflecting the complexity of competing claims from the United States and South Korea.

Kwon’s lawyer, Goran Rodić, repeatedly contested the extradition rulings. However, Montenegro’s Constitutional Court dismissed Kwon’s latest appeal on December 25, paving the way for the Justice Minister’s final order.

The decision to extradite Kwon to the United States signals a significant step forward in holding him accountable for Terra’s catastrophic collapse. U.S. prosecutors are expected to pursue charges related to securities fraud, with Terraform Labs having already agreed to sunset its operations and pay a record $4.47 billion settlement to the Securities and Exchange Commission.

Meanwhile, South Korea’s legal pursuit of Kwon remains active. Should he face trial there in the future and be found guilty of violating local market regulations, he could receive a maximum sentence of 40 years.

While the extradition order by Montenegrin Justice Minister Marko Božović is a decisive move, it remains unclear if Kwon’s legal team will challenge the decision. Given the history of contested extradition rulings in Montenegro, further appeals cannot be ruled out entirely.

For now, Do Kwon’s extradition to the U.S. marks a critical juncture in the global effort to address the consequences of Terra’s collapse. As he prepares to face charges, the crypto world watches closely, awaiting justice for one of the most infamous financial disasters in the industry’s history.