US and Korea seek extradition of crypto fugitive

Montenegro’s justice minister says Singapore may also seek Terraform founder Do Kwon

PODGORICA, Montenegro: The United States and South Korea have sought the extradition from Montenegro of fugitive cryptocurrency entrepreneur Do Kwon, the country’s justice minister said Wednesday, just days after he was arrested in the Balkan nation.

The Terraform founder is facing mounting lawsuits in both Seoul and Washington over his alleged role in fraud linked to the company’s dramatic collapse last year, which wiped out about $40 billion of investors’ money and rocked global crypto markets.

Kwon was arrested with a companion at the airport in the Montenegrin capital Podgorica last week after being found traveling with false travel documents.

– A meeting was held with diplomatic representatives of Korea, after which Korea handed over an extradition demand, Justice Minister Marko Kovac told reporters in Podgorica, adding that “the extradition of Do Kwon was also requested by the United States.”

The minister gave no hint as to where Kwon would eventually be sent.

“We have two countries that asked for extradition. We will see if another country comes,” the minister said, hinting that another request could come from Singapore in the future.

“The person’s citizenship and other circumstances will be taken into account in the decision,” he added.

Kwon, whose full name is Kwon Do-hyung, was detained on Friday along with a companion for up to 30 days on suspicion of document forgery “due to flight risk”.

Kwon now faces two cases in Montenegro – the first involving his alleged possession of forged documents and the second regarding his possible extradition.

After his arrest, South Korea promised to seek formal extradition.

The US also charged Kwon with eight counts of allegedly “orchestrating a multibillion-dollar securities fraud scheme,” according to the US Securities and Exchange Commission.

Kwon is said to have flown from South Korea to Singapore before his company crashed last May.

In September, South Korean prosecutors asked Interpol to place him on the red alert list across the agency’s 195 member nations and revoke his passport.

Kwon’s TerraUSD was marketed as a “stablecoin,” which is typically tied to stable assets like the US dollar to prevent drastic price swings.

But TerraUSD was an “algorithmic stable coin” – not backed by assets, but only tied to its liquid sister currency Luna.

The two currencies were in free fall last May.

Questions about Kwon’s whereabouts intensified after police in Singapore said he was not in the country.

Montenegrin authorities said Thursday that Kwon and a companion had used “falsified travel documents from Costa Rica” during passport control for a flight to Dubai.

Inspection of their luggage also revealed travel documents from Belgium and South Korea, and Interpol checks showed that the Belgian documents were forged, Montenegro’s interior ministry said.

Cryptocurrencies have come under increasing scrutiny from regulators following a series of recent controversies, including the high-profile collapse of exchange FTX.

The digital currency sector has also been hit hard by the demise of US crypto lenders Silvergate and Signature amid a series of banking failures that have rattled global markets.