Samir KajosevicPodgoricaBIRNMarch 24, 202313:19South Korean authorities said they will ask Montenegro to extradite Do Kwon, founder of the collapsed cryptocurrency Terra, who was arrested in Podgorica on Thursday trying to board a flight with falsified ID.

South Korea Seeks Extradition of Detained Crypto Fraudster From Montenegro

Montenegrin police officer escorts South Korean crypto mogul Do Kwon (R) in Podgorica. Photo: EPA-EFE/BORIS PEJOVIC

South Korea has announced it will seek the extraction from Montenegro of the founder of the collapsed cryptocurrency Terra, Do Kwon, and his associate Han Chang-joon.

On Friday, Montenegro’s prosecution charged Do Kwon and Han Chang-hoon with falsifying their ID after they were arrested a day before at Podgorica airport.

Do Kwon and Han Chang-Joon, a senior executive at Chai a mobile payment provider, were arrested trying to board a private flight to the United Arab Emirates with falsified travel documents from Costa Rica.

“During the inspection of luggage, police also found falsified Belgium and South Korean passports. By order of the state prosecutor, three laptops and five mobile phones were taken from them,” police told the media. “Police found that those persons had not registered their entry into Montenegro,” they added.

Podgorica-based lawyer Branko Andjelic said Do Kwon and Han Chang-hoon insisted they did not falsify their documents.

“Both said their travel documents are valid and they insisted the Montenegrin prosecution check them officially. They are also fully willing to participate in the proceedings,” Andjelic told BIRN.

“They did not comment on the extradition procedure at all, because they were not even questioned about it,” he added.

“South Korean prosecutors will take steps to repatriate Do Kwon. We are working on the process,” a spokeswoman for the Seoul Southern District Prosecutors’ Office told AFP on Friday.

In September last year, a South Korean court issued an arrest warrant for the founder of Terraform Lab company after he was accused of fraud by investors in the wake of the collapse of his company.

Kwon was charged with fraud and breaches of South Korea’s capital markets law, but Kwon claimed the charges were “politically motivated.”

On September 26, an Interpol red notice was issued for his arrest for his alleged role in the collapse of the $40 billion Terra Luna (LUNC) and Terra USD (USTC) ecosystem in May 2022.  He is also wanted by regulatory authorities in South Korea, Singapore and the US.

Terraform Labs was behind the Terra USD “stablecoin”, which was designed to have a relatively fixed price and are usually pegged to a real-world commodity or currency. Terra’s value collapsed last May from $116 dollars to less than 0.0002 dollars.

Globally, investors in the two coins lost an estimated $42 billion dollars, according to blockchain analytics firm Elliptic. Some investors lost their entire life savings, and South Korean authorities have opened several criminal probes into the crash.

On February 16, the US Securities and Exchange Commission charged Kwon with “orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities”.

The US Department of Justice has also been probing Kwon’s role in the collapse of the Terra Luna ecosystem, but no criminal charges have been filed against Kwon within the United States.

On February 23, media reported that South Korean and Serbian authorities tried to locate Kwon in Serbia, where he was reportedly hiding out since December 2022. The Serbian authorities did not address the allegations.

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