Do Kwon’s Extradition to the US Approved
BELGRADE: Montenegro announced on Friday that it would extradite South Korean cryptocurrency entrepreneur Do Kwon to the US, following a year and a half of dizzying court rulings and subsequent reversals over his removal.
Background
For months, Seoul and Washington have been seeking the South Korean’s extradition for his suspected role in a fraud linked to the collapse of his company Terraform Labs, which wiped out about US$40 billion of investors’ money and shook global crypto markets.
Arrest and Appeal
The crypto tycoon, whose real name is Kwon Do-hyung, was arrested in March 2023 in Montenegro after trying to board a flight with fake Costa Rican travel documents. He had been on the run for months after fleeing South Korea and then Singapore before Terraform Lab’s crash in 2022.
The Montenegrin constitutional court, on Tuesday rejected an appeal by Kwon’s lawyers against the decision of the Supreme Court, which in September determined that the conditions for extraditing Do Kwon to South Korea and the US for criminal proceedings had been met.
Extradition Decision
After that, it was up to justice minister Bojan Bozovic to decide to which of the two countries Do Kwon would be extradited. "It was concluded that the majority of the criteria prescribed by law favour the extradition request from the competent authorities of the United States of America," the ministry of justice said in a statement on Friday.
"Consequently, the minister of justice issued a decision approving the extradition of Kwon Do Hyung to the US, while simultaneously rejecting the extradition request from the Republic of Korea," it added.
Previous Deportation
Montenegro has already deported Kwon’s business partner who was travelling with him– identified only by his initials J.C.H. – to South Korea in early February.
Terraform Labs and the Collapse
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.
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 Ponzi scheme, in which many investors lost their life savings.
Bankruptcy and Scrutiny
In January, Terraform Labs officially sought bankruptcy protection in the US. Cryptocurrencies have come under increasing scrutiny from regulators after a string of controversies in recent years, including the high-profile collapse of the FTX exchange.
Conclusion
Do Kwon’s extradition to the US marks a significant development in the ongoing saga surrounding the collapse of Terraform Labs. The decision is a major blow to Kwon, who had been on the run for months and had been fighting extradition.
Frequently Asked Questions
Q: What is the significance of Do Kwon’s extradition to the US?
A: Do Kwon’s extradition to the US marks a significant development in the ongoing saga surrounding the collapse of Terraform Labs.
Q: What is Terraform Labs?
A: Terraform Labs is a cryptocurrency company founded by Do Kwon, which created a cryptocurrency called TerraUSD that was marketed as a "stablecoin".
Q: What is the alleged fraud linked to the collapse of Terraform Labs?
A: The alleged fraud is that Do Kwon set up a glorified Ponzi scheme, in which many investors lost their life savings.
Q: What is the current status of Do Kwon’s extradition?
A: Do Kwon’s extradition to the US has been approved by the Montenegrin justice minister, and he is expected to be deported to the US soon.