Montenegro announced its decision on Friday to extradite a cryptocurrency specialist, Do Kwon, to the United States. Kwon is also wanted by South Korea in connection with the bankruptcy of his company, Terraform Labs. His legal team criticized the extradition as unlawful and against European extradition conventions. Both Seoul and Washington have been pursuing Kwon’s extradition for his alleged involvement in a fraud that led to his company’s collapse, causing significant financial losses to investors and impacting global cryptocurrency markets.
Justice Minister Bojan Bozovic approved Kwon’s extradition to the US after a series of court decisions and reversals over the past year and a half. Kwon was apprehended in March 2023 at Podgorica airport while attempting to travel to Dubai using a fake Costa Rican passport. Prior to his arrest, he had evaded authorities by fleeing South Korea and subsequently Singapore before his company’s collapse in 2022.
Following multiple court rulings and reversals on the extradition requests, Montenegro’s Constitutional Court cleared the final obstacle on Tuesday. The court stated that previous legal proceedings had safeguarded Kwon’s right to a fair trial without violating his right to family life. Kwon’s Montenegrin lawyers highlighted the lack of access to the full decision from the justice ministry, citing it as a violation of his fundamental human rights.
Terraform Labs, the company founded by Kwon, introduced a stablecoin called TerraUSD, which was marketed as a stable asset-backed token to prevent extreme price fluctuations. Despite initial success and significant investments, TerraUSD and its companion token Luna faced financial turmoil in May 2022, leading to allegations of operating a Ponzi scheme. Kwon, labeled a “genius” in South Korean media, had left the country prior to the collapse and eventually sought bankruptcy protection in the US in January. This move aimed to enable the company to continue operations while addressing legal challenges in Singapore and the US.
The cryptocurrency industry has faced heightened regulatory scrutiny following various controversies, including the collapse of prominent exchanges.