Montenegro’s Justice Minister, Andrej Milovic, privately confirmed the decision, choosing the U.S. over South Korea in the ongoing jurisdictional dispute.
Kwon, facing charges in both countries, recently received approval for extradition from a Montenegro court.
Terra Co-Founder Legal Battles
Before facing charges in the U.S., Kwon will serve a four-month sentence in Montenegro for document forgery, a consequence of his attempt to leave the country with a false passport.
The South Korean national is indicted in both his home country and the U.S., following the collapse of Terra’s TerraUSD (UST) and the platform’s native asset LUNA.
The downfall of these cryptocurrencies had a cascading impact on the crypto market, causing a market contagion.
In the U.S., Kwon confronts criminal fraud charges from federal prosecutors in New York, coupled with a civil lawsuit by the Securities and Exchange Commission (SEC).
South Korean Investigation on Do Kwon
South Korean investigators express a preference for investigating the case domestically.
The head of the South Korean investigative team Dan Sung-han said:
“We think investigating the case in South Korea would be the most efficient way of bringing justice to investors.”
In South Korea, he faces charges ranging from financial crimes to bribery and manipulating transaction volumes using “trader bots.”
They anticipate that Kwon may potentially face the longest jail term for a financial crime in the country’s history.
Collapse of UST and Luna
In May 2022, the collapse of Terraform Labs marked as a catalyst for a downturn in the cryptocurrency market.
TerraUSD (UST) depegged from the U.S. dollar, contributing to a wave of bankruptcies, affecting firms such as Voyager Digital, BlockFi, Celsius Network, and FTX.
Before being arrested in Montenegro, Kwon’s location remained largely unknown, with speculation placing the Terraform Labs co-founder in Singapore.
While he is expected to face U.S. officials initially, legal experts have not ruled out the possibility of Kwon facing charges in South Korea as well.
Despite the allegations, Kwon maintains his innocence against charges of fraud.