A Montenegro court has extended the detention of Do Kwon for six months awaiting trial on a possible extradition, Agence France-Presse reported. report Thursday.
The former CEO of Terraform Labs has been detained in Montenegro since late March after being arrested at the capital’s Podgorica airport on suspicion of possessing fake travel documents. In Montenegro he faces two separate criminal charges. One related to alleged possession of forged documents and his other related to his possible extradition.
South Korea and the United States are seeking Kwon’s extradition for alleged involvement in fraud related to the company’s dramatic bankruptcy last year. The incident wiped out about $40 billion in investor funds and shocked the global cryptocurrency market.
South Korean entrepreneur Do Kwon founded Terraform Labs, the company behind TerraUSD (UST), a stablecoin that was supposed to maintain parity with the US dollar. UST’s stability was allegedly ensured by an equilibrium arbitrage mechanism with his LUNA, another more speculative cryptocurrency in the ecosystem.
However, in May 2022, the UST lost parity with the US dollar, causing a cascading effect that collapsed the Terra ecosystem almost overnight, wiping billions of dollars from the market. Within months of Terra’s demise, other giants in the industry went bankrupt one after another, including Celius, Voyager, BlockFi, and eventually his FTX.
A South Korean court issued an arrest warrant for Kwon in September 2022. That same month, the International Criminal Police Organization issued an emergency notice to Kwon, urging law enforcement agencies around the world to arrest him on sight. Mr. Kwon was finally arrested in Montenegro on March 23 of this year. He was charged with several crimes by US law enforcement the next day.
Kwon’s arrest and ongoing detention have sparked political controversy in Montenegro. During the recent parliamentary elections, Interim Prime Minister Doritan Abazovic and his supporters accused Europe Now leader Mirojko Spadjić of ties to Kwon. The allegations may have affected Europa Now’s poll performance and led to the party’s current efforts to form a coalition.
The article that the detention of Mr. Do Cuong by the Montenegrin court has been extended for six months was first published on CryptoSlate.
