Montenegro Justice Minister Approves Extradition of Terraform Labs Founder to the United States

Minister of Justice Bojan BoΕΎoviΔ‡ has approved the extradition of Terraform Labs founder Do Kwon to the United States. The decision was made despite South Korea also seeking Kwon’s extradition in connection with the $60 billion Terra-Luna fiasco.

Background on the Case

In 2022, Kwon’s Terra blockchain collapsed, leading to a wave of bankruptcies among over-leveraged crypto businesses, including Three Arrows Capital, BlockFi, and FTX. As the crypto market depression worsened, Kwon fled, prompting Interpol to issue a Red Notice arrest warrant for his capture.

According to local media reports, Kwon had hidden in Serbia before crossing into Montenegro and attempting to fly to Dubai using forged passports. However, he was arrested by police in Montenegro’s capital city, along with Terraform Labs’ former finance officer, Han Chang-joon, before they could board a private plane.

Extradition Battle

Kwon and Chang-joon spent four months in jail as U.S. and South Korean federal prosecutors competed for extradition rights. The decision was repeatedly overturned by multiple courts in Montenegro, and Kwon’s lawyer, Goran RodiΔ‡, contested the extradition orders.

However, on December 25, Montenegro’s Constitutional Court dismissed Kwon’s latest appeal, paving the way for his extradition to the United States.

Potential Consequences

It is unclear whether RodiΔ‡ will challenge the extradition order. If Kwon is found guilty of breaking local market rules in the United States, he could face prosecution for Terra’s collapse. South Korean authorities also have an ongoing Terra case, and if found guilty, Kwon could face a maximum penalty of a 40-year sentence.

Terraform Labs has agreed to sunset its business and pay a record $4.47 billion settlement fine to the Securities and Exchange Commission (SEC).

“The decision to extradite Kwon to the United States marks a significant development in the case, and it remains to be seen how the situation will unfold.”

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