Do Kwon’s detention extended six months by Montenegrin court Do Kwon’s detention extended six months by Montenegrin court
The disgraced Terraform Labs CEO will spend another six months behind bars in the Balkan state as he awaits his extradition trial.
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Updated: Jul. 9, 2023 at 1:35 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
A Montenegro court has extended Do Kwon’s detention by six months as he awaits trial for potential extradition, Agence France Presse reported Thursday.
The former Terraform Labs CEO has been in custody in Montenegro since late March following his arrest at Podgorica Airport in the nation’s capital for allegedly carrying forged travel documents. He faces two separate criminal cases in Montenegro: one related to the alleged possession of counterfeit documents and the other concerning his possible extradition.
Both South Korea and the United States are seeking Kwon’s extradition due to his suspected involvement in a fraud linked to the dramatic collapse of his company last year. The incident wiped out approximately $40 billion of investors’ money and sent shockwaves through the global crypto markets.
Do Kwon, a South Korean entrepreneur, founded Terraform Labs, the company behind TerraUSD (UST), a stablecoin that was supposed to maintain parity with the US dollar. The stability of UST was allegedly ensured by a balancing arbitrage mechanism with LUNA, the ecosystem’s other, more speculative cryptocurrency.
However, in May 2022, UST lost its parity with the US dollar, triggering a cascade effect that collapsed the Terra ecosystem almost overnight and wiped billions from the market. Within months of Terra’s collapse, other major players in the industry including Celsius, Voyager, BlockFi โ and eventually FTX โ failed one after another.
A South Korean court issued a warrant for Kwon’s arrest in September 2022; that same month Interpol issued a red notice on Kwon, requesting law enforcement worldwide to arrest him on sight. Kwon was eventually apprehended in Montenegro on March 23 of this year; he was charged with several crimes by U.S. law enforcement the next day.
The arrest and ongoing detention of Kwon have stirred political controversy in Montenegro. During the recent parliamentary elections, interim Prime Minister Dritan Abazovic and his allies accused Europe Now’s leader Milojko Spajic of having ties with Kwon. The allegations may have impacted Europe Now’s performance at the polls, leading to the party’s current efforts to form a coalition.
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Author 
Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
Editor Editor 
Zaeem Shoaib Zuberi
Zaeem, an editor fascinated by business, finance, DeFi, and cryptocurrencies, holds a business and finance degree. His 14-year career in financial journalism spans sectors like banking, finance, insurance, and tech.
In this article
TerraUSD is a native Terra stablecoin pegged to the US Dollar..
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Voyager
Voyager Digital is a bankrupt cryptocurrency exchange company in the United States that was founded in 2018.
BlockFi
BlockFi is a defunct cryptocurrency lender company which is currently in bankruptcy proceedings.
Do Kwon began his professional journey as an engineer, contributing to tech giants Apple and Microsoft.