Montenegro approves the extradition of cryptocurrency mogul Do Kwon to the United States

Montenegrin police officers escort Terraform Labs founder Do Kwon in Montenegro's capital Podgorica, March 23, 2024. (AP Photo/Risto Bozovic, File)

PODGORICA, Montenegro — Montenegro has approved the extradition of a South Korean mogul known as "the cryptocurrency king" to the United States, the Balkan country's Justice Ministry said on Friday.

Minister Bojan Bozovic has issued a deposition allowing the handover of Do Kwon, the founder of the Singapore crypto firm Terraform Labs who was arrested in Montenegro last year, according to the ministry.

It was not immediately clear when exactly Kwon would be sent to the U.S.

The move follows a months-long legal saga in the case of Do Kwon. Both South Korea and the U.S. had requested Do Kwon's extradition and various courts in Montenegro over the past months have brought and overturned multiple rulings to extradite Kwon either to the U.S. or South Korea.

The Justice Ministry statement cited the latest ruling of Montenegro's Supreme Court which said that conditions have been met for Kwon to be extradited to one of the two countries, and that the final decision lies with the justice minister.

The ministry said on Friday that more legal criteria were in favour of extradition the U.S.

Kwon's lawyers in Montenegro said they learned about the decision from the media and that their client cannot be extradited until they receive the ruling.

"Behind such illegal behaviour of the minister is the fact that the courts, on two occasions ... made a decision to extradite Do Kwon to South Korea," his lawyers said in a statement.

Kwon was charged in the U.S. with fraud by federal prosecutors in New York over a US$40 billion crash of Terraform Labs' cryptocurrency, which devastated retail investors around the world.

He and another South Korean were arrested in Montenegro while trying to depart for Dubai, United Arab Emirates, using fake Costa Rican passports. Kwon has served a prison term in Montenegro for using a fake passport.

Kwon and five others connected to Terraform had been wanted on allegations of fraud and financial crimes in relation to the implosion of its digital currencies in May 2022.

TerraUSD was designed as a "stablecoin," a currency which is pegged to stable assets like the dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg.