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Crypto Mogul Do Kwon Loses Appeal in Montenegro, Extradition Decision Looms
Montenegro’s Constitutional Court has rejected an appeal by Do Kwon, founder of Terraform Labs, paving the way for a decision on his extradition to either the U.S. or South Korea.
The ruling means that Kwon’s case will now be decided by Montenegro’s justice minister, who will determine whether Kwon will be sent to the United States or South Korea for trial. Kwon is wanted in both countries for his alleged role in the crash of the algorithmic stablecoin TerraUSD and token Luna.
Charges and Arrest
In the U.S., Kwon faces charges related to the collapse of his failed cryptocurrency project in May 2022, which resulted in significant losses for both retail and institutional investors. In South Korea, he is also facing legal issues.
Kwon was arrested in Montenegro in March 2023, when he was trying to board a private flight to the UAE with fake documents. The arrest followed an Interpol red notice and global attention.
Background on Terraform Labs and Do Kwon
Do Kwon was a prominent figure in the crypto industry, having created the Terra blockchain network with the promise of revolutionary algorithmic stablecoins. However, everything collapsed in May 2022, just months after the crypto market peaked in late 2021, resulting in $60 billion in losses.
As the crypto industry struggled with bankruptcies, Kwon fled from authorities. Companies like Three Arrows Capital and FTX went bankrupt due to a major liquidity crisis, while Kwon escaped to Europe.
Settlement with the U.S. Securities and Exchange Commission
Kwon’s company, Terraform Labs, agreed to a record $4.47 billion settlement with the U.S. Securities and Exchange Commission after a jury found it guilty of defrauding crypto investors.
The case highlights the importance of regulatory oversight in the crypto industry and the need for investors to be cautious when investing in new and untested cryptocurrency projects.
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