A Montenegrin court has extended Do Kwon’s detention for six months while he awaits trial for possible extradition, Agence France Presse reported Thursday.
The former chief executive of Terraform Labs has been detained in Montenegro since late March following his arrest at Podgorica airport in the country’s capital for allegedly carrying forged travel documents. He is facing two separate criminal cases in Montenegro: one related to the alleged possession of forged documents and the other regarding his possible extradition.
Both South Korea and the United States are seeking Kwon’s extradition over his alleged involvement in fraud related to the dramatic collapse of his company last year. The incident wiped out approximately $40 billion of investor money and sent shockwaves through global crypto markets.
Do Kwon, a South Korean entrepreneur, founded Terraform Labs, the company behind TerraUSD (UST), a stablecoin that was supposed to maintain peg to the US dollar. The stability of UST was supposedly ensured by an equilibrium arbitrage mechanism with LUNA, the other, more speculative cryptocurrency in the ecosystem.
However, in May 2022, UST lost its peg to the US dollar, causing a cascading effect that collapsed the Terra ecosystem almost overnight and wiped billions off the market. Within months of Terra’s collapse, other major industry players including Celsius, Voyager, BlockFi, and eventually FTX failed one after another.
A South Korean court issued an arrest warrant for Kwon in September 2022; That same month, Interpol issued a Red Notice on Kwon, calling on law enforcement around the world to arrest him on sight. Kwon was finally arrested in Montenegro on March 23 of this year; he was charged with various crimes by US police on Next day.
Kwon’s arrest and ongoing detention have sparked political controversy in Montenegro. During recent parliamentary elections, interim Prime Minister Dritan Abazovic and his allies accused Europe Now leader Milojko Spajic of having ties to Kwon. The allegations may have affected Europe Now’s performance at the polls, leading to the party’s current efforts to form a coalition.
The charge Do Kwon’s detention was extended for six months by a Montenegrin court first appeared in CryptoSlate.
