Michelle ThompsonA South Korean man linked to a cryptocurrency crash that cost investors $40 billion (£31.8 billion) has been extradited to the United States.
Do Kwon, former CEO of Terraform, oversaw two cryptocurrencies, TerraUSD and Luna, both of which collapsed in 2022, triggering a broader crypto market downturn.
U.S. authorities have accused Kwon of orchestrating a massive crypto asset securities fraud linked to the coins’ failure.
After fleeing South Korea when an arrest warrant was issued, Kwon was eventually detained in Montenegro. He was found guilty of forging documents by a Montenegrin court after being arrested while trying to board a flight to Dubai in March 2023.
Montenegro’s lack of extradition treaties with the U.S. or South Korea initially cast doubt on whether he would face charges in either country.
Kwon’s transfer to the U.S. concludes an 18-month-long legal battle.
Catastrophic Collapse
The Montenegrin Ministry of Justice approved Do Kwon’s extradition earlier in December, stating that Kwon had also consented to it.
Terraform Labs, Kwon’s company, gained prominence in 2021 as its cryptocurrencies, Luna and TerraUSD, soared in popularity. Luna enthusiasts, known as “Lunatics,” hailed Kwon as their “king.”
However, on May 9, 2022, Terraform Labs suffered a dramatic collapse, losing over 99% of its value within 48 hours. This triggered panic among investors, prompting widespread withdrawals from other cryptocurrencies and causing a sector-wide decline in value.
The so-called “cryptocrash” is estimated to have wiped out $400 billion (£318 billion) in market value. Bitcoin, one of the affected assets, has since recovered and briefly surpassed $100,000 per coin in December.
Terraform Labs eventually declared bankruptcy in the U.S. in January 2024.
