Terra Founder Do Kwon Will Be Extradited to the US

Terra Founder Do Kwon will be extradited to the United States rather than South Korea, Montenegro's Ministry of Justice ruled on Friday after a lengthy series of legal appeals and rulings.

Kwon has been held in Montenegro for months after being detained during an attempt to leave the country with a forged passport. Prosecutors in both South Korea and the U.S. have brought charges against Do Kwon stemming from the collapse of his company's stablecoin UST. Coinage was the first outlet to interview Do Kwon after the failure led to a $40 billion implosion.

A Montenegro court had previously approved Kwon’s extradition, but had deferred to then Justice Minister Andrej Milovic for the final decision on whether he would be sent to the U.S. or South Korea. Do Kwon had appealed that decision and eventually Montenegro's Supreme Court made the final ruling that extradition requirements had been met. On Friday, the country's justice ministry concluded that most legal criteria favored the U.S. request for extradition, leading Montenegrin Justice Minister Bojan Bozovic to sign the ultimate decree.

"It was concluded that the majority of the criteria prescribed by law favor the extradition request from the competent authorities of the United States of America," the Ministry of Justice said in a translated statement on Friday. "Consequently, the Minister of Justice issued a decision approving the extradition of [Do Kwon] to the United States, while simultaneously rejecting the extradition request from the Republic of Korea."

As Coinage has previously reported, Do Kown has denied committing fraud. Our two-part exclusive was the first on-the-record video interview with Kwon following Terra's $40 billion collapse in 2022. Coinage also published a behind-the-scenes retrospective with previously unpublished footage from that interview to uncover more of Kwon's thinking in building Terra's algorithmic stablecoin, UST, which eventually broke from its $1 peg to fall to mere cents.

Do Kwon and the company he founded, Terraform Labs, lost its civil fraud case against the Securities and Exchange Commission earlier this year. The SEC successfully argued that Do Kwon and his firm materially misinformed the public about the ill-fated stablecoin’s ability to maintain a $1 peg — for years — before it eventually collapsed in 2022. That included undisclosed help the company received from the trading firm Jump Crypto in 2021, which helped UST regain its dollar peg.

Additionally, Kwon and Terraform Labs were found liable for material omissions about Terra’s use. At trial, the SEC set out to convince the jury that the South Korean payments app Chai never actually used the blockchain for transactions, despite claims that Kwon made.