The extradition battle between the United States and South Korea over Terraform Labs co-founder Do Kwon has ultimately been won by the U.S. The Prime Minister of Montenegro announced yesterday that Do Kwon has been extradited to the United States to stand trial before 2025. (Background: Is this for real? A Montenegrin court ruled for Do Kwon's extradition back to South Korea) (Additional context: What is Do Kwon's strategy for appealing to the Montenegrin court for extradition to South Korea?) The event of the United States and South Korea competing to prioritize the extradition of Terraform Labs co-founder Do Kwon from the Republic of Montenegro (also known as Montenegro) has finally come to an end. Prime Minister Milojko Spajić announced on X last night: "Today, Montenegro completed the extradition of Do Kwon to the United States to face charges in the Terra/Luna case. Our nation welcomes innovation and legitimate crypto, AI, and other tech entrepreneurs – but we have zero tolerance for fraud." This extradition demonstrates our… — Milojko Spajić (@MickeySpajic) December 31, 2024. $40 billion evaporated. In May 2022, TerraUSD and its related token Luna collapsed, wiping out $40 billion in market value in a very short time, causing massive financial losses for investors and a series of regulatory scrutiny. Do Kwon faces charges including securities fraud, telecommunications fraud, and conspiracy related to the collapse of Terraform Labs' cryptocurrency in both the United States and South Korea. However, after being arrested in March 2023 while attempting to leave Montenegro, the legal battle over where he would be extradited lasted nearly nine months before he was finally extradited to the United States to face fraud charges involving $40 billion. A former chief operating officer of the U.S. Commodity Futures Trading Commission stated: "Terra was touted as a stablecoin trying to mimic the U.S. dollar but ended in a spectacular failure, attempting to maintain its value with cryptocurrency, making it very unstable and experiencing significant devaluation in a short time." The history of Terraform. Kwon co-founded Terraform with Daniel Shin in 2018. In 2020, the company ambitiously announced the launch of a stablecoin called TerraUSD (UST), claiming its value would be pegged to the U.S. dollar, providing investors with a safe haven against the volatility of other crypto assets. Stablecoins typically maintain their specific value through a basket of underlying assets (such as cash and short-term government bonds) and allow investors to redeem at any time. However, Terraform claimed that UST would employ a unique mechanism, linking it to another token issued by the company called LUNA, using complex algorithms to maintain its value relationship with the U.S. dollar. If the value of UST deviated from $1, traders would theoretically be incentivized to buy or sell the stablecoin to restore its value to the target level. In early 2022, UST and LUNA were very popular, with LUNA even briefly becoming one of the top 10 cryptocurrencies by market capitalization, and UST also performed well. Market analyst Noelle Acheson commented: "This mechanism was both interesting and novel, and many smart people believed at the time that it could work successfully." In May 2022, a sudden storm swept through the cryptocurrency market. When a large number of UST holders began to sell off the token en masse, UST quickly broke its peg to the U.S. dollar, causing panic in the market and triggering a broader sell-off, with UST's price nearly falling to zero. At the same time, other tokens related to LUNA and Terraform were also severely impacted, with significant losses in market value. Acheson remarked: "The clever mechanism claimed by UST was built on a false assumption that people expected it to self-correct, so it could self-correct." She further pointed out: "[Kwon] made unrealistic marketing claims about the stability of the stablecoin, misleading many investors." Related reports: SEC demands Terra and Do Kwon pay a huge fine of $5.3 billion, the outcome of the extradition is still undecided. Do Kwon and Terra found guilty of fraud by the United States; details of the defeat revealed. Do Kwon's accomplice in hiding? The Prime Minister of Montenegro is revealed to be an early investor in Terra, holding 750,000 LUNA tokens. Do Kwon, Terraform, and the SEC's fraud lawsuit have reached a "preliminary settlement." LUNA jumped 40% upon hearing the news. Summary of the entire case. "Do Kwon has been extradited to the United States! Facing $40 billion LUNA fraud charges." This article was first published on BlockTempo (the most influential blockchain news media).