A South Korean man, alleged to have played a pivotal role in a cryptocurrency crisis that resulted in a staggering loss of $40 billion (£31.8 billion) for investors, has been extradited to the United States.
Do Kwon was the head of Terraform, the company behind two cryptocurrencies, TerraUSD and Luna. Both digital currencies experienced a significant collapse in 2022, triggering a broader sell-off across the cryptocurrency market.
The United States has attributed the failure of the coins to him, alleging that he “orchestrated a multi-billion dollar crypto asset securities fraud.”
Kwon departed South Korea in the wake of an arrest warrant, ultimately finding refuge in Montenegro, from where he has now been extradited after a protracted legal struggle.
A Montenegro court previously convicted him of document forgery after his arrest while attempting to board a flight to Dubai in March 2023.
The possibility of criminal proceedings against him in the US remained uncertain, particularly given that Montenegro lacks extradition treaties with the United States and South Korea, the latter of which has also been pursuing his extradition.
Kwon’s transfer to the United States marks the conclusion of legal proceedings over 18 months.
In early December, the Montenegrin Ministry of Justice approved the extradition.
It was reported that Do Kwon had also consented to it.
Kwon’s company, Terraform Labs, gained significant attention in 2021 as its cryptocurrencies, Luna and TerraUSD, became popular.
The fanbase of Luna adopted the moniker “Lunatics,” while Kwon earned the title of their “king.”
On May 9, 2022, Terraform Labs experienced a catastrophic collapse, with its value plummeting by more than 99% within a mere 48 hours, despite significant financial investment in the coins.
In a wave of concern, investors rushed to withdraw their funds from various cryptocurrencies, apprehensive that they might face similar downturns. This mass exodus led to a notable decline in values throughout the sector.
Recent estimates indicate that the “crypto crash” phenomenon has led to losses of $400 billion (£318 billion).
Bitcoin experienced fluctuations in value, yet it has seen substantial growth since that time, briefly surpassing the $100,000 mark per coin in December.
In January 2024, Terraform Labs filed for bankruptcy in the United States.