Montenegro on Tuesday extradited to the United States the South Korean cryptocurrency specialist Do Kwon, who is also wanted by Seoul over his firm’s multi-billion-dollar bankruptcy, officials said.
Do Kwon was “handed over to the competent law enforcement authorities of the United States of America and agents of the Federal Bureau of Investigation (FBI)”, Montenegro’s interior ministry said in a statement.
He was extradited upon the decision of Montenegro justice ministry to face “criminal proceedings in the US for crimes of conspiracy to commit fraud”, the statement added.
For months, Seoul and Washington have been seeking the South Korean’s extradition for his suspected role in a fraud linked to his company’s failure, which wiped out about $40 billion of investors’ money and shook global crypto markets.
Last week Justice Minister Bojan Bozovic issued a decision approving the extradition after a year and a half of court rulings and subsequent reversals over it.
Kwon’s Montenegrin lawyers denounced the decision as contrary to European conventions on extradition, and said they will appeal to the country’s constitutional court and to the European Court of Human Rights.
“Today Montenegro completed the extradition of Do Kwon to the United States to face charges in the Terra/Luna case”, Prime Minister Milojko Spajic said on X.
“This extradition demonstrates our unwavering commitment to international justice and the rule of law!”
Fall of a ‘genius’
The crypto tycoon was arrested in March 2023 at the airport in Podgorica, the Montenegrin capital, while preparing to board a flight to Dubai, in possession of a fake Costa Rican passport.
Before his arrest in the tiny Balkan nation, he had been on the run for months, fleeing South Korea and later Singapore, before his company went bankrupt in 2022.
Montenegro had already deported Kwon’s business partner — identified only by his initials J.C.H. — to South Korea in early February.
Terraform Labs created a cryptocurrency called TerraUSD that was marketed as a “stablecoin”, a token that is pegged to stable assets such as the US dollar to prevent drastic fluctuations.
Do Kwon successfully marketed them as the next big thing in crypto, attracting billions in investments and global hype.
Media reports in South Korea described him as a “genius”.
But despite billions in investments, TerraUSD and its sister token Luna went into a death spiral in May 2022.
Experts said Kwon had set up a glorified pyramid scheme, in which many investors lost their life savings.
He left South Korea before the crash and spent months on the run.
In January, Terraform Labs officially sought bankruptcy protection in the United States.
The bankruptcy filing would allow Terraform “to execute on its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and US litigation involving the Securities and Exchange Commission”, the company said in a statement.
It said it also intended to “meet all financial obligations to employees and vendors”.
Cryptocurrencies have come under increasing scrutiny from regulators after a string of controversies in recent years, including the high-profile collapses of exchanges.