Do Kwon, the co-founder of Terraform Labs, whose cryptocurrency project TerraUSD (UST) experienced a dramatic collapse in 2022, may soon face legal proceedings in South Korea. This comes after a Montenegrin court recently ruled in favor of his extradition, though the final decision rests with the country’s Minister of Justice.

South Korean authorities issued an arrest warrant for Kwon in May 2023, accusing him of fraud and financial market manipulation related to the UST’s downfall. The stablecoin, designed to maintain a 1:1 peg with the US dollar, lost its value almost entirely in May 2022, wiping out billions of dollars in investor funds and sending shockwaves through the crypto market.

Kwon, initially residing in Singapore, fled to Serbia after the arrest warrant was issued. He was later apprehended in Montenegro in September 2023 while attempting to board a private jet with falsified travel documents. This event led to separate charges against him in Montenegro for using forged documents, resulting in a four-month prison sentence.

While in Montenegrin custody, both South Korea and the United States submitted extradition requests. The US indictment against Kwon focused on similar charges to those in South Korea, alleging his involvement in a “multi-billion dollar” crypto asset fraud scheme.

Following months of legal proceedings, the Montenegrin High Court initially approved Kwon’s extradition to the United States in February 2024. However, this decision was overturned on appeal a month later, citing procedural irregularities. The court then ruled in favor of his extradition to South Korea, favoring their earlier request.

Despite the legal victory for South Korea, the final decision on Kwon’s extradition lies with Montenegro’s Minister of Justice. The Ministry has not yet publicly confirmed the court’s ruling or announced its own decision on the matter. Additionally, Kwon’s legal team retains the right to further appeal the court’s ruling, potentially delaying or even preventing his extradition.

The potential extradition of Kwon carries significant implications for both South Korea and the broader crypto industry. If he is returned to South Korea and found guilty of the charges against him, it could set a precedent for how authorities handle similar situations in the future, potentially leading to stricter regulations and enforcement within the crypto space.