Do Kwon, the South Korean crypto baron and fugitive, has been extradited to the United States after going on the run in late 2022. Kwon was the man behind the company Terraform, which ran the cryptocurrencies TerraUSD and Luna, both of which collapsed in 2022. That sparked a contagion in the wider crypto market, and they’re estimated to have cost investors $40 billion USD.
Do Kwon fled South Korea shortly after the crash, after an arrest warrant was issued, and eventually pitched up in Montenegro. He was arrested there in March 2023 after attempting to board a flight to Dubai, since when he’s been engaged in fighting his extradition: Montenegro does not have an extradition treaty with either South Korea or the United States.
But in December 2024 the Montenegrin Ministry of Justice approved his extradition to the United States, the Supreme Court having ruled all conditions were fulfilled, and claims Do Kwon himself agreed to it. The onetime king of crypto was handed over to the Feds at Podgorica airport, added Montenegro’s interior ministry in a statement.
Do Kwon will face charges of having deceived investors about the stability of the TerraUSD cryptocurrency, a so-called stablecoin which is intended to hold its value against a real-world asset (in this case the US dollar), and how an app was using the Terraform blockchain. The US says he Kwon was behind the failure of both assets and is guilty of “orchestrating a multi-billion dollar crypto asset securities fraud.” The charges include conspiracy to defraud, commodities fraud, securities fraud, and wire fraud.
Kwon has denied any wrongdoing until this point, though his plea could change now that he’s in the US justice system.
Do Kwon was both the boss and public face of TerraUSD and the self-described “Lunatic” driving the Luna cryptocurrency. The collapse of both in May 2022 saw their value plunge to near-zero, with Terraform Labs losing more than 99% of its value in 48 hours, sparking a wider panic and a loss of around $40 billion on crypto markets. This is considered the major factor behind that year’s wider crypto catastrophe, which got so bad it even dinked the crypto sector’s poster boys including Bitcoin and Ethereum. Numerous smaller crypto firms went under, as well as apparent giants like FTX (with that company’s founder Sam Bankman-Fried now doing 25 years).
After his escape to Montenegro, Do Kwon had tried to argue he should be extradited to South Korea (he is from Seoul) rather than being sent to the US. But he probably didn’t endear himself to the Montenegrin authorities by arriving on a fake passport, and later trying to leave with one.
Terraform Labs unsuccessfully fought the US indictment before filing for bankruptcy in the US in January 2024. Do Kwon agreed in June 2024 to pay an $80 million civil fine and be banned from crypto transactions as part of a $4.55 billion settlement Terraform reached with the US Securities and Exchange Commission.
Do Kwon will soon appear before U.S. Magistrate Judge Robert Lehrburger in Manhattan federal court. It’s a far cry from his heyday in 2021, when the king of the “Lunatics” could do no wrong. Always outspoken, Do Kwon even tried to brazen it out when everything started collapsing around him. In his last interview to date, he got philosophical about the prospect of jail: “Life is long.” Yes, if you’re lucky. But when you carry the can for something like this, the jail time probably will be too.
