Do Kwon, the mastermind behind the TerraUSD and Luna disaster that obliterated $40 billion in crypto, is finally heading to the United States to face justice. Montenegro’s Minister of Justice, Bojan Božović, signed the extradition order, prioritizing the U.S. request over South Korea’s.
This decision comes after Montenegro’s Supreme Court confirmed all legal conditions for extradition were met. The court evaluated criteria such as the gravity of Kwon’s alleged crimes and the sequence of requests, tipping the scales in favor of the U.S.
The Ministry of Justice said, “Most of the criteria provided by law support the request for extradition by the competent authorities of the United States,” effectively shutting down South Korea’s hopes of prosecuting Kwon on its own soil.
The rise and brutal fall of TerraUSD and Luna
Kwon didn’t just create TerraUSD and Luna—he created an empire built on hype, algorithms, and a dangerously flawed financial model. TerraUSD was marketed as a stablecoin that would always be worth $1.
But unlike traditional stablecoins backed by tangible assets, TerraUSD relied on its connection to Luna, another crypto. The idea was simple: TerraUSD could be redeemed for $1 worth of Luna, creating an artificial peg.
To sweeten the deal, Kwon launched the Anchor Protocol, offering 20% annual returns on TerraUSD deposits. Yes, 20%. For a while, this insane rate attracted investors like bees to honey.
Then everything blew up. On May 7, 2022, TerraUSD’s peg slipped to $0.99. Investors panicked, dumping their holdings. In a desperate attempt to fix the situation, Terraform Labs flooded the market with Luna, causing its price to plummet.
Luna, once valued at over $100, became worthless within days. Billions in Bitcoin reserves were deployed in vain to stabilize the collapse. The fallout didn’t just take down TerraUSD and Luna—it triggered a domino effect, bankrupting other crypto firms and wiping out $2 trillion in market value.
The scale of destruction caught the attention of regulators worldwide. U.S. authorities accused Kwon of misleading investors and hiding wealth. South Korea, where Luna had 280,000 holders, wasn’t far behind.
Lawyers there alleged fraud and illegal fundraising, prompting prosecutors to issue an arrest warrant in September 2022. By then, Kwon had vanished from Singapore, forcing Interpol to issue a red notice.
A fugitive’s fall
Kwon didn’t stay on the run forever. His globe-trotting escapades ended in Podgorica, Montenegro, on March 23, 2023. He and Terraform Labs’ former CFO, Han Chang-joon, were busted trying to board a private jet to Dubai using forged passports. The arrest was almost cinematic—Interpol notices, fake documents, and a last-minute airport capture.
Immediately, both the U.S. and South Korea demanded extradition. But first, Montenegro had its own score to settle. Kwon spent four months in a Montenegrin prison for document forgery. After release, he was transferred to a foreign reception center, awaiting the decision that has now landed him in the U.S.’s custody.
Han Chang-joon wasn’t as lucky—or maybe he was. In February this year, Montenegro sent him back to South Korea. Terraform Labs hasn’t gone down without a fight. The company dismissed South Korean charges as politically motivated, arguing that Luna doesn’t qualify as a security under the country’s laws.
They’ve called the accusations “unfounded,” a word that might not carry much weight when $40 billion of investor money has evaporated.
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