Terraform Labs Co-Founder Do Kwon to Be Extradited

The Appellate Court of Montenegro ruled on Thursday that Do Kwon, the co-founder of Terraform Labs, should be returned to his country of origin, South Korea

The ruling affirmed the High Court of Podgorica’s earlier decision in April, which denied a request to extradite the crypto fugitive to the United States. The date of Kwon’s extradition to South Korea has not yet been determined.

The disgraced crypto founder’s most recent ruling in Montenegro, issued on August 1, is the most recent in a succession of protracted and contentious legal disputes. After a March ruling by a high court in Montenegro to return Kwon to South Korea, the top court decided to rescind the decision and refer the case to a lower court in April.

“The High Court in Podgorica’s decision, which permits extradition in a streamlined manner at the Republic of Korea’s request, is legally binding,” the court stated Thursday. No appeal was filed against the decision above.

In May 2022, Terraform Labs, established in 2018, resulted in the collapse of the crypto industry and the loss of at least $40 billion in market value. Terraform Labs filed for Chapter 11 insolvency in Delaware earlier this year following the collapse of its cryptocurrencies in 2022.

After his detention at an airport in Montenegro with falsified travel documents, the United States and South Korea have requested Kwon’s extradition to face charges.

In February 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Terraform and Kwon, alleging that they defrauded U.S. investors who purchased TerraUSD and Luna, Terraform’s digital assets. Simultaneously, Kwon is sought in South Korea on suspicion of fraud and financial offenses associated with the collapse of Luna and Terra USD in May 2022.

In March, the U.S. Department of Justice declared that it is still actively seeking Kwon’s extradition “by relevant international and bilateral agreements and Montenegrin law.”

Ultimately, the crypto fugitive will be extradited to South Korea to be tried for his crimes.

In March 2023, Kwon was apprehended in Montenegro for attempting to travel to Dubai using a counterfeit passport. The founder of Terraform Labs was sentenced to four months in prison, but he was not released on bail until March 2024.

To resolve a civil securities fraud lawsuit, Kwon’s organization, which is currently insolvent, consented to pay the U.S. Securities and Exchange Commission a penalty of approximately $4.5 billion. Kwon contributed $204 million to the agreement. Additionally, Terraform Labs consented to cease operations. It announced a strategic sale process as part of last month’s ongoing Chapter 11 case.