Do Kwon Extradited to the U.S.: The Fall of a Crypto King Behind a $40 Billion Collapse

Montenegro has extradited Do Kwon, the South Korean cryptocurrency expert, to the United States to face serious charges related to his company’s $40 billion bankruptcy. This decision follows months of international pursuit for Kwon, who is accused of conspiracy to commit fraud linked to the collapse of his firm, Terraform Labs.

The Extradition Process

Montenegro’s interior ministry confirmed that Kwon was handed over to the FBI as part of a legal agreement to ensure he faces justice in the U.S. After a lengthy legal battle and multiple court decisions, the Montenegrin Justice Minister approved the extradition, emphasizing the country’s commitment to international law.

Kwon’s legal team has expressed their intention to appeal the extradition, arguing it violates European extradition conventions.

A Notorious Escape

Do Kwon was arrested in March 2023 at Podgorica Airport, attempting to flee to Dubai with a fake passport. He had been on the run for months, evading authorities in both South Korea and Singapore after Terraform Labs filed for bankruptcy in 2022.

Kwon’s business partner was previously deported to South Korea, highlighting the ongoing legal ramifications of their actions.

The Rise and Fall of Terraform Labs

Terraform Labs launched TerraUSD, marketed as a stablecoin, which failed dramatically in May 2022, leading to billions lost by investors. Kwon was initially hailed as a crypto genius, attracting significant investments and media attention. However, experts later criticized his business model as akin to a pyramid scheme that left many investors devastated.

In January 2023, Terraform Labs sought bankruptcy protection in the U.S. to manage ongoing legal issues and fulfill financial obligations to employees and vendors, amidst increasing regulatory scrutiny of the cryptocurrency market following numerous scandals and collapses in the industry.