Do Kwon, founder of Terraform Labs and the issuer of TerraUSD, will be extradited to the US, according to a Bloomberg report.
Kwon and his business helped to crush crypto markets after his algo-based “stablecoin” TerraUSD ended up not so stable. Billions were vaporized in the collapse of the crypto. The collapse of TerraUSD reverberated throughout the crypto markets, helping to kick off a domino effect worldwide.
In the spring of 2022, TerraUSD saw its dollar peg fail. TerraUSD had a built-in arbitrage mechanism in a convoluted process with the Terra blockchain native coin called LUNA. When LUNA started to decline in value, TerraUSD chased it down, destroying all the value. If you are interested in a deeper dive, Rutgers has a good explanation.
As for Kwon, he has been stewing in Montenegro where this justice system was determining where he would go. Kwon is wanted on criminal charges in both the US and South Korea, and apparently, the US will now get Kwon first.
Kwon has already been assessed a civil penalty by the US Securities and Exchange Commission of $4.5 billion.
The US Department of Justice has charged Kwon with various forms of fraud, including market manipulation and commodities fraud. Montenegro has not announced the date as to when Kwon will be shipped off to the US.
Other stablecoin issuers have long been calling for regulatory clarity for this segment of crypto, with some pointing to the collapse of TerraUSD as highlighting the need for stablecoin rules