According to a Bloomberg report citing prison officials, Terraform Labs co-founder Do Kwon was released from prison in Montenegro on Saturday after the Supreme Court considered extradition requests filed by the US and South Korea.
Kwon’s recent ruling ordering his extradition to South Korea is being challenged by Montenegro’s top prosecutor. Last week it emerged that Montenegro’s Supreme Prosecutor’s Office is referring the case to the Supreme Court for reconsideration, claiming that mistakes were made.
Do Kwon was arrested in Montenegro in March 2023 after he was caught using a fake Costa Rican passport while traveling to Dubai in the United Arab Emirates.
“We released Do Kwon from prison when his usual punishment for traveling with false documents ended,” Montenegro prison director Darko Vukcevic told the news service. “Since he is a foreigner and his documents were seized, he was taken for an interview to the Foreigners Police Directorate, which will deal with him further,” – he continued.
Both South Korea and the United States have called for Kwon’s extradition, but Montenegro’s justice minister has given priority to South Korea. The decision is being challenged by Montenegro’s top prosecutor.
Kwon’s arrest and Terra’s downfall
Do Kwon is the architect of the failed TerraUSD stablecoin cryptocurrency project , launched in 2022. As a stablecoin designed as a utility token on the blockchain, TerraUSD was pegged algorithmically 1:1 to the US dollar.
Nevertheless, the stablecoin lost its position, leading to its demise along with Terra’s sister token, LUNA. Authorities in the United States and South Korea have launched an investigation into Kwon, who fled to Singapore to avoid disclosure of fraud charges by South Korean prosecutors.
After he was detained while attempting to flee using a forged Costa Rican passport, Kwon was arrested in Montenegro and sentenced to four months in prison.
For now, South Korean authorities are seeking to have Kwon stand trial for alleged tax evasion and fraud. Kwon, who has denied the charges, said the implosion of the $40 billion Terra ecosystem was the result of market, not criminal, activities.
