Montenegro's Justice Minister has approved the extradition of Do Kwon, founder of Terraform Labs, to the United States, marking a major development in one of cryptocurrency's largest fraud cases.
Kwon faces serious charges related to the $40 billion collapse of the Terra-Luna blockchain ecosystem, which devastated investors worldwide. The decision comes after months of competing extradition requests from both the US and South Korea.
The approval follows Kwon's arrest in Montenegro in March 2023, where authorities caught him attempting to travel to Dubai using fraudulent documents. Montenegro's Constitutional Court recently rejected Kwon's appeal, paving the way for his transfer to US custody.
US prosecutors have built a compelling case against Kwon, alleging he misled investors and engaged in financial fraud leading to Terraform Labs' downfall. The company recently reached a $4.47 billion settlement with the US Securities and Exchange Commission and filed for bankruptcy protection.
The extradition decision represents a pivotal moment for cryptocurrency regulation and enforcement. While South Korea also sought Kwon's extradition, Montenegro's Justice Minister Bojan Bozovic determined the US request better met legal requirements.
A US bankruptcy judge has authorized the sale of Terraform Labs' remaining assets, with potential recoveries estimated between $184.5 million and $442.2 million - far below investor losses from the platform's collapse.
The timing of Kwon's transfer to US custody remains uncertain, but his case highlights growing regulatory oversight of cryptocurrency ventures and increasing accountability for alleged digital asset fraud.