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U.S. and South Korea seek Do Kwon's extradition, but Montenegro charges come first

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(Kitco News) - Both the United States and South Korea are seeking the extradition of TerraForm Labs’ fugitive founder Do Kwon from Montenegro, but any crimes committed in that country will take precedence, Justice Minister Marko Kovac announced at a Wednesday press conference.

“Primacy is given to the court proceedings led in Montenegro,” Kovac told journalists through an interpreter. “If they are convicted for the criminal offense of falsifying identification documents, only after they served their prison sentence is it expected that they will be extradited.”

Kovac said when reviewing extradition requests, “consideration would be given to the gravity of crimes, location of committed offenses, sequence of requests, as well as citizenship.”

The U.S. and South Korea also requested Kwon’s laptops and other devices on suspicion that they might contain evidence of crimes and cryptocurrency. Kovac added that he had not yet received an extradition request from Singapore, where Terraform Labs is incorporated.

Kwon and Terraform Labs’ chief financial officer Han Chang Joon Kwon were arrested at the airport in Montenegro's capital city of Podgorica on Mar. 23 after being caught attempting to travel to Dubai under fake Costa Rican traveling documents. The pair also had Belgian and South Korean travel documents, and the Belgian documents were also forged.

The pressure to capture Kwon had been mounting since he fled his native South Korea following the collapse of the Terra ecosystem in May 2022, with a South Korean court issuing an arrest warrant on Sept. 17 and Interpol issuing a Red Notice two weeks later.

The United States was the latest entity to join in formally targeting Kwon with criminal charges. On Feb. 17, the U.S. Securities and Exchange Commission (SEC) charged Do Kwon with securities fraud, writing that Kwon and Terraform orchestrated “a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

The SEC said Terraform and Kwon “touted and marketed Terra USD (UST) as a ‘yield-bearing’ stablecoin, which they advertised as paying as much as 20 percent interest through the Anchor Protocol,” and that they “repeatedly misled and deceived investors that a popular Korean mobile payment application used the Terra blockchain to settle transactions that would accrue value to LUNA.”

The complaint also alleges that Kwon and others at Terraform “misled investors about UST’s stability before it ultimately depegged from the U.S. dollar and became nearly worthless.

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