- Terraform Labs founder Do Kwon’s extradition from Montenegro to the U.S. was rejected by an appeals court, overturning an initial approval.
- Kwon faces allegations of fraud in the U.S. for the collapse of the Terra blockchain and stablecoin ecosystem in 2022.
- Kwon remains wanted for extradition by both the U.S. and South Korea. His co-founder Daniel Shin faces trial in South Korea over fraud accusations.
Background on Terra’s Collapse
Terraform Labs, founded by Do Kwon and Daniel Shin, created the Terra blockchain and stablecoin. In May 2022, the Terra ecosystem collapsed, erasing tens of billions in market value. This led to fraud allegations against Terraform Labs by U.S. regulators.
Extradition Request and Initial Approval
Kwon was arrested in Montenegro in March 2023. Both the U.S. and South Korea requested his extradition. In November, a Montenegro court approved the extradition request, leaving the final decision to the justice minister.
Appeals Court Overturns Extradition Approval
On December 14, Montenegro’s appeals court canceled the extradition approval. The court ruled that the previous decision violated criminal procedure rules by lacking clear reasoning. The case has been sent back to a lower court for retrial.
Co-Founder Daniel Shin Also Accused
Daniel Shin, Kwon’s Terraform Labs co-founder, faced trial in South Korea in October 2023 over allegations he defrauded investors. Shin claims he left the project for unrelated reasons before its collapse.
The extradition case against Do Kwon continues, with the appeals court overturning the initial approval. Kwon still faces legal jeopardy in both the U.S. and South Korea over the spectacular collapse of Terra’s cryptocurrencies in 2022.