A South Korean accused of being responsible for a cryptocurrency crisis that cost investors $40 billion has finally been extradited to the United States.
Do Kwon was the boss of Terraform, which operated two cryptocurrencies – TerraUSD and Luna – which both crashed in 2022, triggering a broader sell-off in the crypto market.
The United States claims he is responsible for the coins’ failure, accusing him of “orchestrating a multibillion-dollar crypto asset securities fraud.”
Kwon fled South Korea after an arrest warrant was issued for him, eventually ending up in Montenegro from where he has now been extradited, after a lengthy legal battle.
He was previously found guilty of falsifying documents by a court in Montenegro, after being arrested while trying to board a plane to Dubai in March 2023.
It was unclear, however, whether he would face criminal charges in the United States, as Montenegro does not have an extradition treaty with the United States or South Korea, which is also seeking his extradition .
Kwon’s return to the United States ends a legal process that lasted more than 18 months.
The Montenegrin Ministry of Justice approved the extradition in early December.
He claimed that Do Kwon also agreed.
Kwon’s company Terraform Labs became widely known in 2021, when its Luna and TerraUSD coins exploded in popularity.
Luna’s fans became known as “Lunatics”, with Kwon being called their “King”.
But despite the huge amount of money invested in the coins, on May 9, 2022, Terraform Labs collapsed catastrophically, losing over 99% of its value in 48 hours.
Investors were quick to pull their money out of other cryptocurrencies, fearing that a similar thing could happen to them, leading to a significant decline in values across the entire sector.
The so-called “crypto crash” is estimated to have caused losses of $400 billion (£318 billion).
Bitcoin was among the affected assets, but its value has increased significantly since then and briefly rose to over $100,000 per coin in December.
Terraform Labs finally filed for bankruptcy in the United States in January 2024.
