What we know about the Terra founder, his charges and his extradition

Last summer, the collapse of two Terraform Labs crypto projects triggered a wave of bankruptcies in the crypto industry. Now the founder and alleged crypto scammer has been caught.

Do-Hyung Kwon was arrested on March 23 in Podgorica, the Montenegrin capital. With forged documents, he wanted to continue on a private plane to Dubai, but is now in prison in Montenegro. But his extradition to another country could soon be pending. Both the US and South Korea have charged him with alleged cryptocurrency fraud.

Prosecutors from America and South Korea have requested Do Kwon’s extradition from Montenegro. As Montenegro’s Justice Minister Marko Kovac said on Wednesday, March 29, a judge should decide how to proceed.

It takes into account the seriousness of the crimes, the place where they were committed, the order of the requests and Do Kwon’s citizenship, the justice minister said. Political considerations are also likely to influence the decision. It is also possible, according to the minister, that Do Kwon will have to serve a sentence in Montenegro before being extradited because he wanted to travel with forged documents.

Expulsions of persons to other countries are usually based on bilateral or multilateral rules. Such extradition treaties deal, for example, with legal questions, which crimes are covered or how an appeal can be lodged. However, Montenegro has no such treaty with either the US or South Korea.

Because Do Kwon is a South Korean citizen and the country charged him first, many legal experts believe that South Korea has priority in extradition. In fact, South Korean prosecutors charged Do Kwon back in September, while US prosecutors only filed charges a few hours after his arrest in March.

On the other hand, in addition to legal considerations, politics and diplomacy also influence the Montenegrin decision. NATO member Montenegro, but also South Korea as an ally of the US defense agreement, could shy away from challenging the US directly.

But a middle ground is also conceivable. If Do Kwon is extradited to South Korea, the authorities there could also send the accused to the United States for individual trials.

Do Kwon and some of his associates came under the scrutiny of South Korean authorities after the collapse of the Terra ecosystem in the summer. The arrest warrant followed in September. Since then, Do Kwon has been on the run from the authorities.

At the request of South Korea, Do Kwon has been wanted internationally by Interpol since September 26 with a Red Notice. However, Do Kwon denied fleeing.

In September, he poked fun at Twitter for not being traceable and said he had nothing to hide.

Do-Hyung Kwon is a 31-year-old South Korean. He co-founded Terraform Labs with Daniel Shin, a startup that developed two interlinked blockchain projects: the stablecoin Terra USD and the cryptocurrency Luna.

However, in the summer of 2022, the cryptocurrency collapsed and the stablecoin also lost its peg to the US dollar. The bankruptcy of both projects is said to have caused losses totaling $40 billion. The collapses also triggered a tremor in the crypto world and dragged other providers and projects with them. The US Securities and Exchange Commission accuses Do Kwon of fraud in the billions.