Terraform Co-founder Do Kwon Already Extradited To The U.S.

Montenegrin authorities handed over Do Kwon, co-founder of Terraform Labs, to U.S. law enforcement, concluding months of legal battles over his extradition.

In a December 31 statement on X, Montenegrin Prime Minister Milojko Spajić confirmed that Kwon was in U.S. custody and expected to face criminal charges soon.

Kwon, who has been in Montenegrin custody since March 2023 after being arrested for using forged Costa Rican documents while attempting to travel to Dubai, has contested his extradition since his arrest, navigating through the legal system with mixed results.

The extradition decision was approved on December 27 by Montenegrin Justice Minister Bojan Božović. It favored the U.S. over South Korea, which had also sought Kwon’s return. Kwon, a South Korean citizen, faces charges in both nations for his role in the 2022 collapse of the Terra ecosystem—a major event linked to a broader cryptocurrency market downturn.

“Our nation welcomes innovation and legitimate crypto, AI, and other tech entrepreneurs — but we have zero tolerance for fraud,” said Prime Minister Spajić. “This extradition demonstrates our unwavering commitment to international justice and the rule of law.”

Kwon’s legal troubles began after Terra’s algorithmic stablecoin, TerraUSD, and its sister token, LUNA, imploded, erasing billions in value. U.S. prosecutors filed charges against Kwon in March 2023, including commodities fraud, wire fraud, and conspiracy to engage in market manipulation. That same year, he was arrested in Montenegro for using falsified travel documents and served four months in prison.

For more than a year, Kwon remained in legal limbo as Montenegrin courts deliberated his fate. His legal team’s repeated appeals delayed the extradition process, but the final decision marked a turning point in the international pursuit of justice in high-profile crypto fraud cases.

In June, Terraform Labs agreed to a $4.47 billion settlement with the SEC, which included disgorgement fines of roughly $3.6 billion, a $420 million civil penalty, and $467 million in interest payments on the fines.

Following the settlement, Terraform Labs announced it was ending operations on June 12, 2024, and relinquishing control of the Terra ecosystem to the community.

Kwon’s extradition to the U.S. signals a continuation of legal proceedings, although the timeline for his first court appearance remains unclear.