Montenegro confirmed on December 27 that it will extradite South Korean cryptocurrency entrepreneur Do Kwon to the United States (US).
The decision concludes months of legal disputes between the U.S. and South Korea, both of which sought Kwon’s extradition in connection with the $60 billion collapse of the Terra-Luna blockchain.
Why Montenegro Chose U.S. Over South Korea in the Do Kwon Extradition Case
Once hailed as a revolutionary blockchain project, Terra imploded in 2022.
The collapse cost billions of dollars and forced major firms such as Three Arrows Capital, BlockFi, and FTX into bankruptcy.
Steady lads, deploying…to the U.S.
Montenegro's Justice Minister has approved the extradition of Do Kwon to the U.S.
The Terraform Labs founder will face charges over the $40B crypto collapse. pic.twitter.com/W3K82fXy09— Satoshi Club (@esatoshiclub) December 27, 2024
Investigators worldwide began probing Kwon’s role in the catastrophic fallout, leaving investors reeling and undermining trust in the cryptocurrency sector.
Following the Terra-Luna collapse, Kwon evaded authorities, even as Interpol issued a Red Notice against him. He initially fled to Serbia and later moved to Montenegro.
In March 2023, Kwon and former Terraform Labs finance officer Han Chang-joon were arrested at Podgorica Airport while attempting to board a private flight to Dubai using fake Costa Rican travel documents.
After their arrest, Kwon and Han spent four months in a Montenegrin jail while prosecutors from the U.S. and South Korea vied for extradition rights.
Multiple reversals occurred in legal proceedings in Montenegro. Kwon’s legal team, led by Balkan attorney Goran Rodić, contests each decision.
Earlier this week, Montenegro’s Constitutional Court rejected an appeal by Kwon’s lawyers, clearing the way for the Justice Ministry’s decision.
The appeal had challenged a September ruling by the Supreme Court, which found that conditions for his extradition to both South Korea and the United States had been met.
Justice Minister Bojan Bozovic made the final decision, announcing that the U.S. request would take precedence.
“The majority of the criteria prescribed by law favor the extradition request from the competent authorities of the United States of America,” the Justice Ministry stated.
The decision simultaneously rejected South Korea’s request for Kwon’s extradition. In February, Montenegro deported Kwon’s business partner, identified only as J.C.H., to South Korea.
From Crypto Genius to Fugitive: The Rise and Fall of Do Kwon
Earlier this year, Terraform Labs agreed to shut down and pay the SEC a record $4.47 billion fine. U.S. prosecutors are pursuing additional criminal charges with severe penalties possible.
In South Korea, if convicted of violating financial laws, Kwon could face up to 40 years in prison. The country continues to press its case for extradition.
Terraform Labs developed TerraUSD, a stablecoin pegged to assets like the U.S. dollar and Luna, its sister token.
The tokens attracted massive investments and media attention. South Korean outlets even hailed Kwon as a “genius.”
However, in May 2022, both collapsed in a financial “death spiral,” devastating investors and sparking criticism of Terraform Labs as a Ponzi scheme.
After its collapse in January 2023, Terraform Labs filed for U.S. bankruptcy protection, which was followed by many legal challenges.
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