Do Kwon Released From Montenegro Prison With Extradition Verdict Still Underway: Report

Do Kwon South Korea Terraform Labs

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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March 25, 2024 00:17 EDT

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Terraform Labs co-founder Do Kwon was released from prison in Montenegro on Saturday as the Supreme Court deliberates on extradition requests from the U.S. and South Korea, according to a Bloomberg report citing prison officials.Kwon’s recent ruling mandating his extradition to South Korea is being challenged by Montenegro’s top prosecutor.

Last week it emerged the Supreme State Prosecutor’s Office in Montenegro is escalating the case to the Supreme Court for review claiming errors were made. 

Do Kwon was arrested in Montenegro in March 2023 after being caught using a fake Costa Rican passport traveling to Dubai, United Arab Emirates.

“We released Do Kwon from prison as his regular prison term for traveling with fake papers ended,” Montenegro prison director Darko Vukcevic told the news outlet. “Since he is a foreign citizen and his documents were withheld, he was taken for an interview to police directorate for foreigners, and they will deal with him further,” said Vukcevic.

Both South Korea and the U.S. had appealed to extradite Kwon, however, Montenegro’s minister of justice gave preference to South Korea. This decision is being challenged by Montenegro’s top prosecutor.  

Do Kwon’s Arrest and Terra’s Collapse

Do Kwon is the architect behind the failed crypto project TerraUSD stablecoin, launched in 2022. As a stablecoin designed to be a utility token on the blockchain, Terra USD was pegged algorithmically 1:1 to the U.S. dollar.

The stablecoin lost its pegging, however, resulting in its collapse alongside LUNA, the Terra sister token. The United States and South Korean authorities went after Kwon, who escaped to Singapore to avoid South Korean prosecutors from opening his fraud charges.

Kwon was later apprehended in Montenegro and sentenced to four months imprisonment after he was caught trying to escape using a forged Costa Rican passport.

As it stands, South Korean authorities are escalating efforts to ensure Kwon faces prosecution for his alleged fraud cases and tax evasion.

Kwon, who denied the charges, claimed that the $40 billion implosion of the Terra ecosystem resulted from market forces and doesn’t indicate any criminal action.