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eth-usd
Ignacio Teson•Tuesday, December 31, 2024•1 min read
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Kwon Do-Hyeong, the South Korean entrepreneur behind Terraform Labs, has been extradited to the United States by Montenegro, nearly two years after his arrest in Podgorica.
Officials from Montenegro announced the transfer on Tuesday, citing accusations of multi-billion-dollar fraud tied to the collapse of Terraform Labs.
Terraform Labs, founded in 2018, developed the cryptocurrencies TerraUSD and Luna. Their downfall wiped out an estimated $40 billion in investor funds, triggering widespread disruption in global cryptocurrency markets.
FBI Role and Terra – Luna
Montenegro’s Ministry of the Interior confirmed in a statement that Do Kwon was handed over to U.S. authorities, including agents from the Federal Bureau of Investigation (FBI). The statement highlighted that he faces criminal charges in the U.S., including conspiracy to commit fraud.
Kwon’s extradition follows a lengthy legal process. His lawyers announced plans to appeal the decision before Montenegro’s Constitutional Court and the European Court of Human Rights.
The cryptocurrency mogul was arrested in March 2023 at Podgorica Airport while attempting to board a flight to Dubai using a falsified Costa Rican passport.
Once hailed as a “genius” by South Korean media, Kwon rose to prominence for his rapid success in the cryptocurrency industry, attracting billions in investments. Before launching Terraform Labs, he worked at Apple and Microsoft.
The TerraUSD Affaire
TerraUSD was marketed as a stablecoin, maintaining a fixed value of one U.S. dollar per coin, ostensibly less volatile than traditional cryptocurrencies like Bitcoin. However, its stability relied on an algorithm rather than tangible reserves such as foreign currency or assets.
Experts allege that Kwon orchestrated a Ponzi scheme, using funds from new investors to pay returns to existing ones. The collapse of Terraform Labs has intensified global scrutiny of cryptocurrency regulation and stablecoin practices.
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
www.fxleaders.com