Montenegro to extradite crypto entrepreneur Do Kwon to US

Montenegro announced on Friday that it would extradite South Korean cryptocurrency entrepreneur Do Kwon to the United States, following a year and a half of dizzying court rulings and subsequent reversals over his removal.

For months, Seoul and Washington have been seeking the South Korean’s extradition for his suspected role in a fraud linked to the collapse of his company Terraform Labs, which wiped out about $40 billion of investors’ money and shook global crypto markets.

The crypto tycoon, whose real name is Kwon Do-hyung, was arrested in March 2023 in Montenegro after trying to board a flight with fake Costa Rican travel documents.

He had been on the run for months after fleeing South Korea and then Singapore before Terraform Lab’s crash in 2022.

The Montenegrin Constitutional Court, on Tuesday rejected an appeal by Kwon’s lawyers against the decision of the Supreme Court, which in September determined that the conditions for extraditing Do Kwon to South Korea and the United States for criminal proceedings had been met.

After that, it was up to Justice Minister Bojan Bozovic to decide to which of the two countries Do Kwon would be extradited.

“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 statement on Friday.

“Consequently, the Minister of Justice issued a decision approving the extradition of Kwon Do Hyung to the United States, while simultaneously rejecting the extradition request from the Republic of Korea,” it added.

Montenegro has already deported Kwon’s business partner who was traveling with him—identified only by his initials J.C.H.—to South Korea in early February.

Terraform Labs created a cryptocurrency called TerraUSD that was marketed as a “stablecoin”, a token that is pegged to stable assets such as the US dollar to prevent drastic fluctuations.

Do Kwon successfully marketed them as the next big thing in crypto, attracting billions in investments and global hype.

But despite billions in investments, TerraUSD and its sister token Luna went into a death spiral in May 2022.

Experts said Kwon had set up a glorified Ponzi scheme, in which many investors lost their life savings.

In January, Terraform Labs officially sought bankruptcy protection in the United States.

Cryptocurrencies have come under increasing scrutiny from regulators after a string of controversies in recent years, including the high-profile collapse of the FTX exchange.

© 2024 AFP