Terraform Labs co-founder and crypto fugitive, Do Kwon, set for extradition to South Korea

The Montenegrin Court of Appeals ruled on Thursday that Terraform Labs co-founder Do Kwon must be extradited to his native South Korea. The decision confirmed a previous decision by the Podgorica High Court in April that rejected the crypto smuggler’s request for extradition to the United States. A date for Kwon’s extradition to South Korea has not yet been set.

The ruling, handed down in Montenegro on August 1, is the latest in a series of back-and-forth and protracted legal battles for the disgraced crypto founder. After a Montenegrin high court ruled in March to extradite Kwon to South Korea, the highest court decided to overturn the decision and sent the case back to a lower court in April.

“There was no appeal against the decision in question, so the decision of the Podgorica High Court, on the part of which it allows extradition through an abbreviated procedure at the request of the Republic of Korea, is legally binding,” the court said in a statement on Thursday.

Founded in 2018, Terraform Labs wiped out at least $40 billion in market value and crashed the crypto industry in May 2022. Earlier this year, following the collapse of its own cryptocurrency in 2022, Terraform Labs filed for Chapter 11 bankruptcy in Delaware.

After Kwon was arrested at an airport in the country with fake travel documents, both the United States and South Korea requested his extradition from Montenegro to face legal charges against him.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Kwon and Terraform for allegedly defrauding U.S. investors who purchased digital assets TerraUSD and Luna in February 2023. Kwon is also wanted in South Korea on allegations of fraud and financial crimes related to the collapse of Terra USD and Luna in May 2022.

The US Justice Department said in March that it was continuing to seek Kwon’s extradition “in accordance with relevant international and bilateral agreements and Montenegrin law.”

The cryptocurrency smuggler is expected to be extradited to South Korea and brought to justice.

Kwon was arrested in Montenegro in March 2023 after trying to travel to Dubai with a fake passport. The Terraform Labs founder was sentenced to four months in prison but remained in custody until he was released on bail in March 2024.

Kwon’s bankrupt company agreed to pay a penalty of approximately $4.5 billion to the U.S. SEC to resolve a civil securities fraud case. The deal included a $204 million contribution from Kwon. Terraform Labs also agreed to wind down its operations. Just last month, it announced a strategic sale process as part of its ongoing Chapter 11 case.