Do Kwon Extradited to US Over $40 Billion TerraUSD Collapse

According to reports, Montenegro has completed the legal extradition process of Terraform Labs co-founder Do Kwon to the US. He is facing fraud charges linked to the $40 billion collapse of the TerraUSD stablecoin in 2022. 

The decision, announced by the Justice Ministry, resolves a standoff between competing extradition requests from the US and South Korea.

Do Kwon Will Face Trial in the US

Justice Minister Bojan Bozovic approved the US extradition request on Friday, citing legal criteria favoring the American authorities. However, the ministry did not specify when the transfer would take place. 

Earlier rulings by Montenegrin courts had indicated that Kwon should be sent to South Korea. So, there was some uncertainty about the final resolution. However, the criteria for US extradition was stronger, based on the nature of the offense and place of execution.

Bearing in mind the judgment of the Supreme Court, the Ministry of Justice considered all facts and circumstances and appreciated the criteria such as the gravity of the offenses, the place of execution, the order of filing, the nationality of the requested person, the possibility of further extradition to another state. In view of the above, it was concluded that most of the criteria provided by law support the request for extradition of the competent authorities of the United States,” Montenegro’s Ministry of Justice stated.

Kwon was arrested in Montenegro in March 2023, along with his business partner, Han Chong Jun, while attempting to board a flight to Dubai using fake passports. 

Last week, Montenegro’s court dismissed his appeal against extradition, citing insufficient legal grounds. The Manhattan US attorney’s office filed fraud charges against Kwon last year, accusing him of misleading investors and concealing assets following the TerraUSD collapse. 

The crash wiped $40 billion from the crypto market, triggering a financial domino effect that led to several bankruptcies in the sector. Kwon’s case has been compared to that of FTX founder Sam Bankman-Fried. He is likely to face a similar trial to Bankman-Fried, who was extradited from the Bahamas and is serving a 25-year sentence.

“Do Kwon’s extradition is official—he’s heading to the US after a long legal ride. His TerraUSD and Luna tokens crashed in 2022—burning $40bn and sparking the crypto meltdown that saw $400bn vanish. It’s officially over for Kwon—but the damage to the market lingers,” Mario Nawfal wrote on X (formerly Twitter). 

In June 2024, Terraform Labs reached a settlement with the SEC, agreeing to pay $4.47 billion in penalties. Kwon was personally fined over $200 million, including disgorgement, civil penalties, and interest.

Reports of Kwon’s alleged ties to political figures in Montenegro have further fueled controversy. Local media have linked him to Milojko Spajic, leader of the Europe Now party, raising questions about potential financial connections.