5 months ago
Do Kwon, the South Korean co-founder of Terraform Labs, was extradited from Montenegro to the US, ending months of ineligible proceedings implicit the matter, according to section media reports.
Montenegrin constabulary transferred Kwon to US authorities astatine Podgorica International Airport connected Dec. 31. He is acceptable to look charges stemming from the 2022 illness of the TerraLUNA ecosystem, which wiped astir $40 cardinal from the market.
Kwon was arrested successful March 2023 successful Montenegro for attempting to question with a fake passport. Since then, helium fought extradition to the US and alternatively sought repatriation to South Korea.
However, Montenegro’s judiciary repeatedly denied his appeals, and Justice Minister Bojan Bozovic signed the extradition order to the US past week.
TerraLUNA collapse
TerraUSD, marketed arsenic a stablecoin designed to support parity with the US dollar, de-pegged sharply, wiping retired implicit $40 cardinal successful marketplace worth and leaving thousands of investors with monolithic losses. The clang sent shockwaves done the broader crypto market, prompting regulatory scrutiny and allegations of fraud.
Kwon co-founded Terraform Labs successful 2018, promoting TerraUSD arsenic a revolutionary decentralized fiscal tool. However, critics warned that the algorithmic exemplary underpinning TerraUSD’s stableness was unsustainable.
When the stablecoin’s worth plummeted, the accompanying illness of Luna exacerbated the losses, with the full marketplace worth of the 2 tokens declining by an estimated $33.9 billion.
Following the crash, South Korean authorities issued a warrant for Kwon’s apprehension connected charges including fraud and taxation evasion. Investors besides filed lawsuits alleging that Kwon and his institution operated a Ponzi scheme, misleading them astir the viability of TerraUSD and Luna.
Kwon’s arrest
Interpol issued a reddish announcement for Kwon successful September 2022, marking him arsenic a high-priority planetary fugitive. Despite this, Kwon remained elusive for months, allegedly traveling betwixt respective countries earlier being apprehended successful Montenegro.
During his arrest, constabulary discovered that Kwon was utilizing falsified Costa Rican and Belgian passports, adding charges of papers forgery to his ineligible troubles.
While South Korea has sought Kwon’s extradition to look charges domestically, Montenegrin authorities prioritized extraditing him to the United States. In the US, Kwon is expected to look proceedings for securities fraud, ligament fraud, and conspiracy related to the implosion of Terraform Labs’ cryptocurrencies.
Kwon’s lawsuit has go emblematic of the risks and regulatory challenges wrong the crypto industry. The TerraUSD illness prompted planetary calls for tighter oversight of integer assets, with regulators informing against the systemic risks posed by poorly managed stablecoins.
The extradition signals a caller section successful the planetary pursuit of accountability wrong the crypto sector, arsenic Kwon’s proceedings successful the US is expected to scrutinize his relation successful 1 of the largest fiscal collapses successful crypto history.
The station US authorities instrumentality custody of Do Kwon, ending months-long extradition process appeared archetypal connected CryptoSlate.
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