Authorities in Montenegro will reportedly release Terraform Labs co-founder Do Kwon as local courts decide on his fate over extradition to the United States or South Korea.

According to a March 22 report from Montenegrin news outlet Vijesti, Kwon will be allowed to leave prison on March 23 after being held in custody for roughly a year but forced to surrender his travel documents to prevent him from leaving the country. The decision to release Kwon reportedly came from the Council of the Supreme Court, which is set to review a decision that could grant or deny extradition to his native South Korea.

Montenegrin authorities to release Do Kwon as he awaits extradition: Report image 0 Source: Vijesti

Kwon was arrested in Montenegro in March 2023 for using falsified travel documents with his colleague, Terraform Labs’ former chief financial officer Han Chang-joon. Authorities from the U.S. and South Korea filed competing extradition requests to have Kwon face fraud charges in their respective countries, but no final decision has been made.

If extradited to the United States, the Terraform Labs co-founder would likely face eight felony charges filed by prosecutors in March 2023. In South Korea, Kwon could face an indictment for fraud and violations of capital markets law. It’s unclear where he will ultimately be extradited, if at all, at the time of publication.

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Prosecutors purportedly plan to confiscate Kwon’s South Korean passport, which authorities applied to revoke in 2022 after the collapse of Terra. He reportedly used a forged Costa Rican passport in Montenegro — which Kwon claimed was authentic — leading to his 2023 arrest.

Terraform Labs co-founder Shin Hyun-Seong, also known as Daniel Shin, and others associated with the platform face criminal charges for defrauding investors at trial. Shin stayed in South Korea after the collapse of Terra in May 2022, an event for which the platform faced regulatory scrutiny and contributed to a significant crypto market downturn.

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