Do Kwon, former crypto darling and now fugitive, was arrested in Montenegro this March while attempting to flee to Dubai. The High Court in Podgorica, the Montenegrin capital, has now given approval for Do Kwon’s extradition, though whether he’ll be off to South Korea or the US, both of which have open arrest warrants for him, remains to be decided.
Do Kwon was the main player and public face of the TerraUSD stablecoin and the self-described “Lunatic” driving the Luna cryptocurrency. You can probably tell where this is going. The more-or-less overnight collapse of both caused a loss of around $40 billion on crypto markets and was the major factor behind the 2022 catastrophe-slash-contagion that saw FTX go under, with its founder Sam Bankman-Fried now facing a lengthy jail sentence, and a multitude of other crypto firms go bust.
The one-time crypto baron did what all innocent people do in such a situation, and fled to a country that has no extradition treaty with the US or South Korea, while publicly declaring he wasn’t on the run. Sadly for Do Kwon, the High Court has “determined that the legal requirements for the extradition of the accused KDH have been met, at the request of South Korea and the United States of America.”
Even now he’s trying to angle it. Do Kwon has consented to being extradited to South Korea (he is originally from Seoul) under a shortened process rather than face being sent to the US. The decision on his destination rests with Montenegro’s minister of justice Marko Kovač, who has not commented on the current ruling but said on Do Kwon’s arrest that “determining which state they will be extradited to will be based on several factors.”
Do Kwon had entered Montenegro using a faked passport, after fleeing Singapore in September 2022. He said multiple times he wasn’t on the run, which didn’t stop South Korea issuing an arrest warrant and shortly thereafter Interpol issuing a Red Notice. The US authorities have filed an indictment against him, saying he orchestrated “a multi-billion-dollar crypto asset securities fraud”, with charges including conspiracy to defraud, commodities fraud, securities fraud, and wire fraud.
That’s a lotta (alleged) fraud. Not to be deterred, Do Kwon’s former company Terraform Labs attempted to have the US case dismissed, but this was denied in August 2023.
The collapse of TerraUSD and Luna saw the value of both plunge to near-zero in May 2022, and triggered a huge wave of crypto selling. This got so big it affected the crypto sector’s poster boys including Bitcoin and Ethereum, and ever since we’ve seen one crypto disaster after another: FTX just happens to be the biggest.
The one upside is that this seems to have served as a serious wake up call for regulators, who since 2022’s so-called crypto winter have been pursuing the figureheads behind these institutions with a renewed zeal. In his last interview to date, Do Kwon got a little philosophical about the prospect of jail: “Life is long.” In some cases yes but, when you’re behind something like this, the sentence probably will be too.