- Amidst an ongoing extradition dispute, Terraform Labs co-founder now faces two more months in jail in Montenegro.
- Montenegro’s High Court is seeking to extradite Kwon to the U.S. where he faces criminal charges, but the defendant’s lawyer disputes the extradition.
In the ongoing criminal case against Terraform Labs co-founder Do Kwon, the case could stretch into 2024 following an extradition dispute. Kwon faces extradition to either the U.S. or his country of birth in South Korea. In both countries, the co-founder is charged with criminal and fraud charges. The former CEO of Terraform Labs, the company behind the stablecoin TerraUSD that collapsed in 2022, sent the entire crypto market plummeting and investors of the stablecoin losing billions in investment.
Due to the complexity of this case, the court is seeking to extend the term in custody. This would see Do Kwon spend another two months in the Montenegro jails.
“The court in Podgorica ruled that the term in custody, which would have expired on Friday, be prolonged by two months to Feb. 15,” a recent report stated.
Do Kwon was arrested in March this year. He was detained with the former finance officer for Terraform Labs Han Chang-joon at the airport in Podgorica, the capital of Montenegro when boarding a flight to Dubai.
In addition to the awaiting cases in South Korea and the U.S., the entrepreneur faces a class-action lawsuit in Singapore, where 375 claimants allege losses of $57 million. The claimants allege fraudulent misrepresentation by Terraform Labs and Do Kwon, particularly concerning the promotion of the algorithmic stablecoin terraUSD (UST). The dramatic plunge of UST’s value in May 2022, which saw it fall to less than $0.10.
Earlier this month, Kwon’s lawyers filed an appeal against the High Court’s decision to extradite. “I do not accept the court’s decision to extradite me, so I do not submit to the court’s decision,” his legal representatives noted.
Since UST imploded, Kwon has been pleading innocent blaming the crash of the project on the the algorithm. In an interview last year, Kwon insisted that the Terra network wasn’t a fraud as many people were erroneously thinking. The Terraforms labs CEO said;
I was confident about the bets and statements I made on UST (TerraUSD) ‘s behalf.” Kwon said he firmly believed in the value proposition and resilience of the TerraUSD. However, he has lost these bets since he couldn’t match his words with his actions.
Despite these claims, accusations persist that the CEO was running a fraudulent project. Daniel Shin, the co-founder of collapsed stablecoin issuer Terraform Labs, blamed former CEO Do Kwon. Through his lawyers, he added;
The cause of the coin plunge was the unreasonable operation of the Anchor Protocol conducted by CEO Kwon and external attacks. It has nothing to do with Shin,
Following the collapse, Terraform Labs began trading a new cryptocurrency dubbed Luna 2.0 which has been celebrating relative success since its launch.
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