Montenegro orders extradition of Terraform lab co-founder Do Kwon to United States

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SARAJEVO (Reuters) -Montenegrin Justice Minister Bojan Bozovic has ordered the extradition of Terraform Labs co-founder Do Kwon, also wanted by South Korea, to the United States, the ministry said on Friday.

A South Korean national, Kwon is the former CEO of South Korea-based Terraform Labs, the company behind the TerraUSD, a “stablecoin” designed to maintain a constant $1 price, which collapsed in May 2022, roiling cryptocurrency markets.

He was arrested in March 2023 while attempting to leave Montenegro.

After the Supreme Court determined that all legal conditions were fulfilled to extradite Kwon, the Justice Ministry concluded that most legal criteria favoured the U.S. request so Bozovic signed a decree to send him to the United States and denied such a request from South Korea, the ministry said in a statement.

Kwon has denied wrongdoing. He also faces related U.S. criminal charges.

His lawyers said that Bozovic had declined to deliver his decision on their request, thus violating their client’s basic human rights, the right to defence and legal remedy, the Pobjeda newspaper reported.

Kwon and his company Terraform Labs were sued by the U.S. Securities and Exchange Commission in February 2023 over the TerraUSD and Luna cryptocurrencies, which authorities have said caused about $40 billion of losses in crypto markets.

A stablecoin is a digital asset that aims to keep a stable price. Usually pegged to a currency, they are intended to be less volatile than other cryptocurrencies.

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.

(Reporting by Daria Sito-Sucic and Aleksandar Vasovic; Editing by Kevin Liffey)