Do Kwon to be Extradited to South Korea, Montenegro Court Rules

Do Kwon, co-founder of the bankrupt Terraform Labs, will be extradited to South Korea following a ruling by a Montenegro appeals court on Thursday. This decision rejects the United States' request for his extradition, but the timing of his transfer remains uncertain.

The ruling comes after a prolonged legal battle between South Korea and the US over Kwon's extradition. The appeals court's decision upholds a previous lower court ruling. While the specific charges Kwon faces in South Korea are unknown, US prosecutors have charged him with fraud.

Kwon and an associate were arrested last year while traveling from Montenegro to Dubai using fake documents. Though initially ordered for extradition by a lower court, the decision was temporarily halted by the Supreme Court due to procedural concerns raised by Montenegro's top prosecutor. Kwon was released on bail during this period.

Kwon is known for creating Terraform Labs, whose cryptocurrencies, TerraUSD and Luna, collapsed in 2022, erasing approximately $37 billion in value. This downfall had a ripple effect, leading to the closure of several other cryptocurrency firms.

In June, Terraform Labs and Kwon reached a settlement with the US Securities and Exchange Commission (SEC), agreeing to pay about $4.5 billion in recovery and civil penalties. Kwon himself agreed to pay at least $204.3 million. The SEC had initially sought $5.3 billion, but Kwon's legal team countered with a proposal of only $1 million in civil penalties and no recovery or injunction.

As part of the settlement, Kwon and Terraform Labs will be permanently banned from buying and selling crypto asset securities, including tokens within the Terra ecosystem.

Earlier this year, Terraform Labs filed for bankruptcy in Delaware, United States, declaring liabilities and estimated assets both ranging between $100 million and $500 million.