It should be noted that the problems of the detained Do Kwon are really big. Initially he was sought by South Korean officials, but shortly after his arrest, US prosecutors also joined the process. Specifically, charges against Terra’s co-founder were brought by the New York City prosecutor’s office, whose representatives believe that Kwon orchestrated a multi-year cryptocurrency fraud scheme that ended with at least $40 billion missing from the market.

The case was the second major arrest of a prominent member of the cryptocurrency industry since late 2022. Recall that at the time, Sam Bankman-Fried, founder of cryptocurrency exchange FTX, was arrested in the Bahamas. He is suspected, among other things, of e-fraud, for which he could receive up to 20 years in prison.

However, as it was revealed the day before, Sam may also have paid bribes to Chinese officials. It is speculated that the $40 million bribe may have been needed to unlock the frozen billion-dollar Alameda Research on a Chinese cryptocurrency exchange. And that certainly won’t have a positive impact on Bankman-Fried’s fate.

What happened to the creator of Terra?

Protos journalists interviewed a local lawyer who wished to remain anonymous. He understands the local legal framework and is therefore able to predict further developments.

According to him, Do Kwon’s life has changed dramatically from flying on private planes to a prison cell with far worse conditions.

In 2020, a US State Department human rights report detailed the grim conditions of overcrowding and aggressive treatment by staff in prisons in Montenegro. According to the lawyer, “the situation has hardly changed since that report”. Here is his quote in this regard.

After arrest you are kept in quarantine for ten days to make sure you are not sick with COVID-19. The cells are quite normal – you share a cell with one or two other people. But after quarantine, detainees are transferred to a shared cell with others who are awaiting trial.

Conditions are much worse in shared cells: they are only 8 square meters in size and accommodate up to 11 people. Often there is not enough bed for each person, which predictably causes problems with sleep. During the day, inmates are provided with a half-hour walk. They can also buy basic necessities such as cigarettes and coffee from the commissary.

After the arrest of Do Kwon, Montenegrin government officials held a press conference. Here’s what the country’s Minister of Justice Marko Kovac said at it, whose relevant remark is quoted by Decrypt.

We would like to state that the extradition of Do Hyun Kwon and his accomplice Han Chan Jung has been officially requested by South Korea to the Montenegrin Ministry of Justice. The extradition of Do Hyun Kwon alone has also been requested by the United States of America.

Since at least two countries have already requested extradition, Kwon’s fate will be decided by a court taking into account all the circumstances. He continues.

When we receive several extradition requests, the determination of which state he will be extradited to is based on several factors. These are the gravity, the place and time of the criminal offence committed, the order in which we received the extradition requests and others.

The anonymous lawyer believes that the process will take at least one year before the parties reach a final agreement on the direction of extradition. During this time, Kwon's case will be tried in a local court in Montenegro, which will last at least 4-5 months. However, this goes against the words of prosecutor in Kwon's case who said that the defendant will be taken to another country in about a month.

How Terra’s founder was found and arrested

Recall that South Korean authorities issued an arrest warrant for Do Kwon last September following a criminal investigation into the collapse of the Terra ecosystem. The collapse of the project had an impact on the entire crypto-industry, triggering a domino effect: still after Terra, several other major platforms and companies went bankrupt, including hedge fund Three Arrows Capital and the FTX exchange.

Interpol later approved South Korea’s red notice request for Kwon, making him a wanted criminal worldwide. US federal prosecutors meanwhile charged Kwon with fraud. The suspect’s whereabouts remained a mystery for months, all the while remaining public online and even giving interviews.

In September, South Korean authorities announced that Kwon was not in Singapore as they had previously believed. A few months later, authorities suspected he was based in Serbia, a country that borders Montenegro. As we can see, the law enforcement authorities did find the right trail, although Kwon had tentatively blamed himself for his own arrest. To recap, he was detained while trying to board a flight to Dubai, using a fake passport at the time – allegedly from Costa Rica.


We believe the US and South Korean authorities will fight vigorously for the possibility of extraditing Do Kwon specifically to their territory. Yet the former businessman's actions have resulted in the loss of tens of billions of dollars to investors - and that is a serious transgression. Prosecutors will be motivated to prove that they are right. In addition, Do Kwon's case is widely known outside the blockchain industry, so it's definitely worth looking into.


Look for even more interesting things in our crypto-chat of ex-wealthy people. There we discuss other important topics that affect the atmosphere in the digital asset world in one way or another.