S. Korea to seek extradition of crypto fugitive Kwon from Montenegro

South Korean prosecutors said Friday they will seek the extradition of Do Kwon, the wanted co-founder of Terraform Labs, behind a multibillion-dollar crash of the firm’s cryptocurrency last year, after he was arrested in Montenegro.

The Seoul Southern District Prosecutors Office will begin the process to request Montenegro to transfer Kwon, who was arrested at the airport in the capital Podgorica on Thursday. His identity was confirmed through fingerprint comparison earlier in the day.

South Korea has joined the European Convention on Extradition, a multilateral treaty to facilitate extradition between the member states, of which Montenegro is also a member, the justice ministry said.

It is unclear, however, whether Kwon would be sent to South Korea.

As he is also facing criminal charges in the United States, he could be handed over to the U.S. The Bloomberg news agency reported earlier in the day that Kwon was charged with fraud and other counts by U.S. prosecutors.

Kwon, who had been a fugitive for several months after last being spotted in neighboring Balkan country Serbia in December last year, was detained along with one of his close aides, surnamed Han, after attempting to travel to Dubai with forged passports.

On Friday, Montenegro officials filed a criminal complaint against Kwon and his companion for forging documents, AFP reported, citing local police.

It also reported that Kwon will be presented in a court in Podgorica on Friday, where the extradition request for the fugitive will be heard, citing a court official.

The disgraced entrepreneur has been under investigation for alleged fraud and tax evasion after investors in TerraUSD and Luna filed complaints against Kwon last May, accusing him of a Ponzi scheme over the loss of billions of won following the crash of both coins.

Prosecutors have since sought an arrest warrant for Kwon on allegations including providing false information to investors and the violation of the capital market law.

Interpol also issued a red notice, used for the highest level of wanted suspects and criminals. His passport has since been invalidated.

Prosecutors are also continuing to investigate Daniel Shin, another co-founder of Terraform Labs, on charges of gaining illegal profits before the collapse of the coins.

TerraUSD was designed as a stablecoin, which was pegged to stable assets like the U.S. dollar. But holders of TerraUSD and Luna lost more than an estimated US$40 billion in market value after the stablecoin plunged far below its $1 peg in late May.