The court in Montenegro’s capital, Podgorica, has granted approval for the extradition of Do Kwon, co-founder of Terra. This decision opens up the possibility of him being extradited to either South Korea or the United States.
Do Kwon, the co-founder of Terraform Labs, is known for his involvement in the development of the Terra blockchain and its native stablecoin, TerraUSD (UST), as well as the LUNA cryptocurrency.
However, Do Kwon is currently facing legal challenges. In February 2023, the U.S. Securities and Exchange Commission (SEC) filed a civil fraud lawsuit against both him and Terraform Labs.
The SEC accuses them of misleading U.S. investors who purchased TerraUSD and Luna, alleging that they misrepresented the risk associated with TerraUSD and provided misleading information about the use of Luna in South Korea.
In March 2023, Do Kwon was reportedly arrested in Montenegro and charged with fraud by U.S. prosecutors. This arrest followed the SEC lawsuit and occurred amidst ongoing legal issues concerning Terraform Labs and its cryptocurrency offerings.
The final decision on the extradition ultimately rests with the Montenegrin Justice Minister. However, this decision will only be made after Kwon completes a four-month prison term in Montenegro for document forgery.
Kwon, the co-founder, is currently facing multiple fraud charges by U.S. federal prosecutors. Additionally, he is dealing with existing civil charges in the U.S. and an ongoing investigation in South Korea related to the collapse of terraUSD last year.
Earlier this month, the Montenegro High Court upheld Kwon and his associate Han Chang-Joon’s four-month prison sentence for document falsification. Their appeal was dismissed, with the court deeming the sentence appropriate. Do Kwon’s potential extradition to either South Korea or the U.S. will take place following the completion of his sentence in Montenegro.
In a separate development, Daniel Shin, co-founder of Terraform Labs, was indicted in South Korea in April for violations of capital markets law. As a result, prosecutors froze $185 million in assets. Shin, however, denies involvement in the company’s collapse and asserts that he left two years prior.
In a strategic move to enhance its blockchain ecosystem capabilities, Terraform Labs has acquired Pulsar Finance, a cross-chain analytics startup. Led by Chris Amani, this acquisition marks a shift in strategic focus towards prioritizing utility in the development of the blockchain ecosystem.
Terraform intends to integrate Pulsar’s technology into its infrastructure tools, thereby accelerating the development and market introduction of cross-chain applications.
Through this acquisition, Terraform Labs demonstrates its commitment to strengthening its technological capabilities amidst legal challenges and leadership transitions.
The legal and regulatory hurdles faced by Do Kwon and Terraform Labs have garnered significant attention within the cryptocurrency and blockchain community, highlighting the broader impact of regulatory scrutiny on the industry.
