Do Kwon, the founder of Terraform Labs, the company behind the Terra stablecoin and the LUNA cryptocurrency, is facing extradition to South Korea or the U.S. after a Montenegro court approved the requests from both countries.
Kwon, along with former Terra executive Han Chang-joon, was arrested in Montenegro in March for allegedly attempting to travel with forged documents.
They were accused of using fake Belgian passports to board a flight from Podgorica to Istanbul, where they planned to fly to an undisclosed destination.
Kwon is wanted in South Korea and the U.S. for fraud, securities law violations, and other charges related to the collapse of the Terra-LUNA project, which was valued at over $40 billion at its peak in May 2020.
The project was planned to become a decentralized payment system using stablecoins pegged to various fiat currencies, and a native token called LUNA that was used to stabilize the price of the stablecoins.
However, the project faced regulatory scrutiny, technical issues, and market volatility, which led to a massive loss of value and confidence among investors and users.
Kwon has denied any wrongdoing and claimed that he never intended to deceive anyone and admitted that mistakes were made in the management of the project, but it was an innovative and ambitious attempt to create a new paradigm for digital money.
The Basic Court in Podgorica initially approved a bail request of 400,000 euros ($428,000) for Kwon and Han in April, but it was annulled by the High Court in May, which demanded more evidence on their financial situation.
The Basic Court then approved a second bail request for the same amount in June, after the defendants provided more details on their assets.
However, the bail approval did not guarantee their release, as the court also had to decide on the extradition requests from South Korea and the U.S.
The court said that it considered the gravity of the charges, the evidence presented by the requesting countries, and the international treaties on extradition.
It also said that it did not find any grounds to reject the extradition requests, such as the risk of human rights violations, political persecution, or double jeopardy.
Kwon and Han have the right to appeal the extradition ruling to the High Court within three days. Their lawyers have not yet commented on the court’s decision.
But, if the extradition is confirmed, Kwon and Han will face trial in either South Korea or the U.S., where they could face up to 20 years in prison if convicted.