US, South Korea both seek Do Kwon’s extradition to face charges

Do Kwon, the founder of Terraform Labs, which operated the so-called TerraUSD stablecoin and its sister token LUNA, was arrested in Montenegro Thursday morning after months in hiding while trying to board a flight to flee Dubai with falsified documents. 

Thursday night — a few hours after Kwon was arrested at the airport in Podgorica, the capital of Montenegro —  the U.S. prosecutors charged Kwon with eight criminal indictments, including securities fraud and conspiracy, for his alleged roles in what wiped out about $40 billion from the crypto market. Interpol also confirmed Thursday that the man detained in Montenegro is crypto fugitive Do Kwon, or Do-Hyung Kwon, who is wanted in South Korea and the U.S. on fraud charges, per CNN. 

So, what’s next to come? We don’t know which country Kwon will be sent to as he now faces criminal charges in the U.S. by the Justice Department and Securities and Exchange Commission (SEC) and his native country, South Korea. Still, the U.S. and South Korea appear to be seeking Kwon’s extradition. (We will keep this in sight regarding how it would pan out.) 

U.S. federal prosecutors reportedly said they would seek Kwon’s extradition to New York, while their Korean counterpart is also seeking Kwon’s extradition. A spokesperson of South Korean prosecutors told TechCrunch that they are discussing with “related parties” about extraditing Kwon as soon as possible. The spokesperson, however, did not specify which country Kwon would be shifted to from Montenegro, or how long it is likely to take, and the identity of the related parties. 

Kwon is facing a myriad of criminal proceedings. Since the Terra/LUNA collapse in May 2022, a South Korean court has issued an arrest warrant against him, and Interpol issued a red notice, a call to law enforcement worldwide, in September to capture Kwon, who said in an interview with Coinage in August that he wasn’t charged with anything. 

In October, South Korean prosecutors reportedly requested the local foreign affairs ministry to nullify Kwon’s passport unless he returned that by Sept 15. (Kwon’s passport, which was not returned by then, appears to have been revoked.) 

The Singapore-headquartered blockchain platform entrepreneur, who claimed he wasn’t on the run but whose location was unknown, registered his address in Serbia via United Arab Emirates in December, according to reports. Most recently, the U.S. SEC charged Terraform Labs and Kwon with defrauding U.S. investors who purchased its crypto assets – Terra and LUNA.