According to a report from Bloomberg citing prison officials, Do Kwon, co-founder of Terraform Labs, was released from prison in Montenegro on Saturday while the Supreme Court considers extradition requests from both the U.S. and South Korea.
The recent decision mandating Kwon’s extradition to South Korea is currently under challenge by Montenegro’s top prosecutor. Last week, it was revealed that Montenegro’s Supreme State Prosecutor’s Office is elevating the case to the Supreme Court for review, citing alleged errors in the process.
Kwon was initially arrested in Montenegro in March 2023 for using a counterfeit Costa Rican passport while traveling to Dubai, United Arab Emirates.
“We released Do Kwon from prison as his regular prison term for traveling with fake papers ended,” stated Montenegro prison director Darko Vukcevic to the news outlet. “Since he is a foreign citizen and his documents were withheld, he was taken for an interview to the police directorate for foreigners, and they will handle his case further,” Vukcevic added.
Both the U.S. and South Korea have sought Kwon’s extradition, but Montenegro’s minister of justice has given preference to South Korea. However, this decision is now being contested by Montenegro’s top prosecutor.
Do Kwon’s Arrest and Terra’s Collapse
Do Kwon, the mastermind behind the ill-fated cryptocurrency endeavor TerraUSD stablecoin, which debuted in 2022, found himself embroiled in controversy. TerraUSD aimed to serve as a stablecoin utility token on the blockchain, maintaining a fixed 1:1 ratio with the U.S. dollar through algorithmic pegging.
However, the stablecoin’s pegging faltered, leading to its collapse alongside LUNA, its counterpart in the Terra ecosystem. Pursued by authorities from both the United States and South Korea, Kwon fled to Singapore to evade facing fraud charges brought forth by South Korean prosecutors.
Eventually captured in Montenegro, Kwon received a four-month prison sentence after authorities intercepted his attempt to flee using a counterfeit Costa Rican passport.
Presently, South Korean authorities are intensifying their efforts to ensure Kwon faces prosecution for alleged fraud and tax evasion.
While maintaining his innocence, Kwon argued that the $40 billion collapse of the Terra ecosystem was driven by market dynamics and did not signify any criminal wrongdoing on his part.
