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Fugitive Terraform CFO Extradited: South Korea Gets Closer to Terraform Crash Answers

Last Updated February 6, 2024 1:26 PM
Teuta Franjkovic
Last Updated February 6, 2024 1:26 PM

Key Takeaways

  • Han Chang-joon, Terraform’s ex-CFO, faces fraud charges in South Korea after Montenegro approved his extradition.
  • The co-founder remains detained awaiting another appeal, with both S. Korea and the US seeking his extradition.
  • The future holds uncertainty as authorities in Montenegro determine who gets Kwon: South Korea or the US.

Montenegro has taken a significant legal step by extraditing  Han Chang-joon, the former financial officer of Terraform Labs, to South Korea.

Han is set to face charges related to fraud in South Korea. The extradition was facilitated following a decision by Montenegro’s Justice Ministry.

Montenegro Extradites Former Terraform Labs CFO to South Korea

Montenegro’s law enforcement has confirmed  the extradition of Han Chang-joon, the ex-financial officer of Terraform Labs, to South Korea. This development occurred nearly a year after Han, alongside Terraform Labs co-founder Do Kwon, was apprehended for attempting to escape the country. The Montenegro Justice Ministry sanctioned the transfer of Han to South Korean authorities, as reported by the police.

“The state of Montenegro acted today upon request from South Korea and the Justice Ministry handed over Han Chang-joon to the relevant authorities of his native country,” announced in a post on X , accompanied by a photograph depicting Han accompanied by two masked policemen at the airport near Podgorica, the capital.

CCN previously disclosed that both Han and Do Kwon were detained after being caught with fake identity documents. The duo was then sentenced to a four-month prison term for the offense. Following the sentencing, Do Kwon challenged the verdict, but his appeal was ultimately dismissed by a higher court in November 2023.

The Montenegro police announced  their decision to extradite the financial officer in a statement, providing the following explanations and justifications for their action:

“Han [was extradited to allow South Korean authorities to initiate] criminal proceedings for several criminal offences related to fraud in financial investment services, investments and the capital market, which is punishable by life imprisonment in South Korea.”

Do Kwon Awaits Extradition Ruling as Legal Saga Continues

In the case of Do Kwon, the co-founder of Terraform Labs, who is wanted by both South Korean and U.S. authorities, his lawyer has provided an update indicating that they are currently waiting for the court to make a ruling on another appeal.

Kwon is currently detained for possible extradition, with authorities yet to determine whether he will be sent to South Korea or the United States. Both nations are seeking his extradition on charges related to fraud. Goran Rodic, the lawyer representing both individuals, confirmed  Han’s extradition through a text message.

Montenegro’s Justice Minister, Andrej Milovic, mentioned  that he has not made a decision regarding the destination of Kwon’s extradition.

Kwon is known as the creator of the ill-fated TerraUSD stablecoin, which suffered a catastrophic collapse in May 2022, resulting in the loss of at least $40 billion in investor assets and contributing to a downturn in the cryptocurrency market.

Crypto legal expert Davit Lesperance told CCN  that the tug-of-war between South Korea and the US will continue in the Do Kwon case.

He said:

“While South Korea has managed to secure the return of TerraLabs CFO, the Montenegro government has not yet made a final decision as to the fate of Do Kwon himself. While the Justice Minister is the one who will make the announcement, there is little doubt that the Prime Minister Milojko Spajić is the ultimate decider.

He will not be considering Do Kwon’s desires but rather will be weighing his country’s best interests between appeasing NATO ally the United States and a relatively small trade partner Korea. My bet is Do Kwon will soon be boarding a plane with the Stars and Stripes on the tail.”

Terraform Labs Under Investigation for $40 Billion Crypto Crash

Singapore-registered Terraform Labs, the company behind the TerraUSD stablecoin, recently revealed its application for bankruptcy protection in a Delaware court.

The company stated that this step is intended to allow it to maintain its operations and continue its support for the Terra community and ecosystem amidst ongoing investigations into the $40 billion cryptocurrency crash .

The company also emphasized that the bankruptcy filing  would enable them to carry out their business plan efficiently while dealing with ongoing legal matters, including representative litigation in Singapore and the United States, which involves the US Securities and Exchange Commission (SEC).

Terraform Labs expressed its commitment to meeting all financial commitments to its employees and vendors throughout the Chapter 11 proceedings, affirming that no additional financing would be necessary for this purpose. Reports indicate that the company has disclosed assets and liabilities falling within the range of $100 million to $500 million.

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