Montenegro says Terra's co-founder is facing criminal proceedings for using falsified travel documents — and if convicted, he would have to serve a sentence for that first.
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Both South Korea and the U.S. have requested Do Kwon's extradition from Montenegro.
The Terraform Labs founder was arrested at an airport after trying to travel to Dubai using falsified travel documents.
Both countries are pursuing criminal charges following the $40 billion collapse of LUNA and UST last May — and while he denies he was on the run, an Interpol red notice had been issued for his arrest.
South Korea's Justice Ministry had intelligence that Kwon and Terra's chief financial officer, Hon Chang Joon, were hiding in neighboring Serbia.
While the U.S. is only seeking Kwon's extradition, South Korea is seeking both men. At this point, it's unclear which country will take precedence.
And there's another complicating factor, too. Kwon and Joon are under investigation for using the falsified travel documents — and could face criminal proceedings. The offense can carry up to five years in prison — and any extradition would only take place after they faced a trial in Montenegro and served a sentence there.
It's claimed doctored Costa Rican and Belgian passports were on their person, as well as laptop computers.
Montenegro's justice minister, Marko Kovac, said:
"The Ministry of Justice of Montenegro guarantees that the citizens of South Korea will be granted all the rights in accordance with the laws in Montenegro and international agreements."
Shortly after Kwon's arrest last week, prosecutors in New York charged him with conspiracy to defraud, two counts of commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation.
The Southern District of New York is also spearheading the criminal trial against Sam Bankman-Fried, the embattled founder of FTX.