Montenegro court says Do Kwon should be extradited to US, WSJ reports

Do Kwon, the cryptocurrency entrepreneur, who created the failed Terra (UST) stablecoin, is taken to court in handcuffs, to face charges of forging official documents, in Podgorica, Montenegro, March 24, 2023. REUTERS/Stevo Vasiljevic/File Photo

(Reuters) - A court in Montenegro on Wednesday ruled that crypto entrepreneur and Terraforms Labs co-founder Do Kwon should be extradited to the United States, rather than to his home country South Korea, to stand trial on fraud charges, the Wall Street Journal reported.

In 2023, Do Kwon and Terraform were charged by the U.S. Securities and Exchange Commission with a multibillion-dollar fraud.

The SEC's civil case against Terraform and Kwon stems from the collapse of TerraUSD, a "stablecoin" designed to maintain a constant $1 price, and the more traditional token Luna, which was closely linked to TerraUSD.

Both cryptocurrencies lost an estimated $40 billion or more when TerraUSD in May 2022 failed to maintain its $1 peg.

The SEC said Terraform and Kwon deceived investors about the stability of TerraUSD, and how a popular Korean mobile payment app used the Terraform blockchain to settle transactions.

Kwon has been held in Montenegro since his arrest last March and has previously denied allegations.

Last month, a federal judge delayed the SEC's trial to allow time for Kwon to be extradited so he can attend. In an order, U.S. District Judge Jed Rakoff in Manhattan pushed back the trial to March 25 from Jan. 29, with no further delays even if Kwon were not extradited.

(Reporting by Pritam Biswas in Bengaluru; Editing by Maju Samuel)

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