US to Contest Do Kwon Extradition to South Korea in Crypto Case

Chris Strohm and Chris Dolmetsch, Bloomberg News

Do Kwon in Seoul in April 2022. , Bloomberg

(Bloomberg) -- Prosecutors in the US will continue to seek extradition of former cryptocurrency mogul Do Kwon despite a ruling by Montenegro’s High Court to hand him over to his native South Korea to face charges over the $40 billion collapse of the TerraUSD stablecoin in 2022.

“The United States continues to seek Kwon’s extradition in accordance with relevant international and bilateral agreements and Montenegrin law,” the Justice Department said in a statement Thursday. “The United States appreciates the cooperation of the Montenegrin authorities in ensuring that all individuals are subject to the rule of law.”

The court decision is the latest twist in the legal journey for the Terraform Labs Pte co-founder, who was a fugitive from South Korean charges for months before he was arrested in Montenegro in March 2023 for traveling on a fake passport. Kwon’s arrest set off dueling extradition requests by prosecutors in Seoul and New York.

The ruling is a win for Kwon, whose lawyers have expressed a preference for him to go to South Korea. In the US, another crypto mogul, Sam Bankman-Fried, is now facing potentially decades in prison after he was convicted of fraud in New York in November. The FTX co-founder was prosecuted by the Manhattan US attorney’s office, which also indicted Kwon on fraud charges.

Read More: Do Kwon to Be Extradited to South Korea Over US, Court Rules

“No official notification has yet been received from Montenegro,” South Korea’s Justice Ministry said in a text message, adding that the ministry will take the necessary steps in conjunction with Montenegrin authorities once the paperwork comes through.

Some crypto industry lawyers who are following the case questioned the decision to send Kwon to South Korea.

Terrence Yang, a managing director at Swan Bitcoin and former counsel at Merrill Lynch, called the decision “a travesty,” especially since the US has successfully prosecuted others involved in big crypto collapses like FTX.

“The US probably has the largest number of victims by both number and dollar amount,” Yang said. “It seems a bit ridiculous for the Montenegro court to extradite Do Kwon to South Korea, where he might get acquitted or a comically light sentence as opposed to the United States.”

--With assistance from Misha Savic, Jasmina Kuzmanovic and Shinhye Kang.

(Updates with a comment from South Korea’s Justice Ministry in the fifth paragraph.)