US, South Korea both seek Do Kwon's extradition to face charges

Do Kwon, the founder of Terraform Labs, which operated the TerraUSD stablecoin and its sister token LUNA, was arrested in Montenegro on Thursday while trying to board a flight to flee to Dubai with falsified documents.

A few hours after Kwon was arrested at the airport in Podgorica, the capital of Montenegro, U.S. prosecutors charged Kwon with eight criminal indictments, including securities fraud and conspiracy, for his alleged role in the decline of TerraUSD and LUNA, which wiped out about $40 billion of value from the crypto market. Interpol also confirmed Kwon's identity on Thursday, per CNN.

What's next? We don't know which country Kwon will be sent to, as he now faces criminal charges in the U.S as well as his native country, South Korea. Both countries appear to be seeking Kwon's extradition.

A spokesperson for South Korean prosecutors told TechCrunch that they are discussing with "related parties" about extraditing Kwon to the country as soon as possible. The spokesperson did not specify which country Kwon would be moved to from Montenegro, how long it is likely to take, or the identity of the related parties.

Kwon has been under investigation for the past 11 months since the Terra/LUNA collapse, which wiped out about $40 billion from the cryptocurrency market.

In mid-September, Kwon tweeted, “I am not ‘on the run’ or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide.”

“We are in the process of defending ourselves in multiple jurisdictions – we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months,” he said at the time.

In late September, his whereabouts were unknown and Interpol issued a red notice requesting law enforcement agencies worldwide search for and arrest him. Shortly after, the South Korean government ordered Kwon to surrender his passport or risk it getting revoked.

Do Kwon said last October that charges leveled against him by the South Korean prosecutors are not legitimate and are politically motivated.

Fast-forward to February, prosecutors in South Korea traveled to Serbia, suspecting that was where Kwon was staying. In mid-February, The U.S. Securities and Exchange Commission charged Terraform Labs and Kwon with defrauding U.S. investors who purchased its crypto assets, LUNA and the not-so-stable stablecoin, Terra.