Montenegro extradites Terraform Labs co-founder Do Kwon to the US with help from Interpol

Montenegro has extradited Terraform Labs co-founder Do Kwon to the U.S. on Tuesday, according to local news outlet Vijesti.

"Today, at the Podgorica Airport border crossing, South Korean citizen Kwon Do-Hyung, who was sought by two countries — South Korea and the United States — was extradited by the NCB Interpol Podgorica officials with the support of the special police unit," Vijesti reported, citing a statement from Montenegro's Ministry of Justice.

The report added the founder and former CEO of Terraform Labs was handed over to U.S. law enforcement authorities and FBI agents, following a decision by the Ministry of Justice of Montenegro.

The extradition comes after months of legal proceedings in Montenegro, where Kwon faced competing extradition requests from the U.S. and South Korea. He will face criminal charges in the U.S., including conspiracy to commit fraud related to securities transactions, money laundering and electronic fraud. The charges stem from his role in the collapse of TerraUSD and Luna, the algorithmic stablecoin and cryptocurrency associated with Terraform Labs, which resulted in billions of dollars in investor losses.

Montenegro's minister of justice signs extradition order

The development comes after the Minister of Justice of Montenegro, Bojan Božović, signed the order to have the Terraform Labs co-founder extradited to the U.S. on Friday.

The move comes after a decision from the Constitutional Court of Montenegro, which rejected Kwon’s appeal against a previous Supreme Court ruling that nullified the Terra founder's transfer to South Korea. In September the court ruled the minister of justice would make the final extradition decision, which ultimately led to the signing of his extradition order to the U.S.

The decision was based on several criteria, including the severity of the criminal offenses, the location of the crimes, the order of extradition requests, Kwon’s nationality and the potential for further extradition, according to the ministry.

Extradition ordeal

Kwon’s arrest in Montenegro in March 2023 followed the collapse of the algorithmic stablecoin TerraUSD and its sister cryptocurrency Luna. Authorities in South Korea , the U.S. and Interpol issued warrants for his arrest in connection with the incident. The Terraform Labs co-founder and former CEO was arrested in Montenegro in March last year for traveling with forged travel documents and served time in the country prior to his extradition. 

Kwon’s legal journey in Montenegro has been marked by delays and reversals. Initially, in February 2024, a Montenegrin court ruled to extradite Kwon to the U.S. to face charges related to the Terra-Luna crash. However, in March, the court reversed its decision, opting to extradite him to South Korea instead. This led to a protracted legal battle with multiple appeals and inconsistent rulings.

The case gained political attention in Montenegro, where former Justice Minister Andrej Milovic accused Prime Minister Milojko Spajić of influencing the decision in favor of South Korea due to alleged financial ties between the government and Kwon.