• Kwon was arrested last week by Montenegrin police after he allegedly used fake documents
  • Terraform is under investigation in Singapore but it has not yet requested for extradition
  • Kwon is faced with multiple charges in the U.S. and South Korea in relation to the UST's crash

The United States and South Korea have made efforts to request the extradition of fallen Terraform Labs co-founder and CEO Do Kwon, but Montenegro Justice Minister Marko Kovac reiterated that "primacy" in terms of court proceedings will be provided to Montenegro legal proceedings first before an extradition process begins.

"Primacy is given to the court proceedings led in Montenegro. If they are convicted for the criminal offense of falsifying identification documents, only after they served their prison sentence is it expected that they will be extradited," Kovac said Wednesday through an interpreter, CoinDesk reported.

Kwon and his associate, Han Chang Joon, were arrested last week by Montenegrin police in the capital of Podgorica for his alleged use of falsified documents. Interpol has since confirmed that Kwon was identified through a fingerprint match, as per CNN.

Officials with the Montenegro corrections department said Kwon and his associate are expected to stay behind bars for up to 30 days. Only legal counsel and family members will be allowed to visit the 31-year-old entrepreneur, Yonhap News reported.

Kwon could face up to five years behind bars over official document forgery if he is convicted in Montenegro, according to an interview with his attorney by Yonhap, as reported by The Korea Times.

Huh Jeong, prosecutor at Seoul Southern District Prosecutor's Office, told reporters that it was "hard" to predict when exactly Kwon will be extradited to his home country.

Kovac also revealed that while the Montenegrin government has yet to receive an extradition request from Singapore, he was aware of reports about Terraform being under investigation there.

Singapore police launched an investigation into Terraform Labs earlier this month, as per a Bloomberg report. The police told Bloomberg in an email that inquiries about the probe were "ongoing."

On the U.S. and South Korea's request to have Kwon extradited and to which country the request will be granted, Kovac only said the "citizenship of the person and other circumstances will be taken into account when deciding."

Singapore-based Terraform Labs was behind the creation of the TerraUSD (UST) stablecoin and its sister coin Luna, which witnessed a dramatic crash in May 2022, wiping out about $40 billion in the crypto market. The collapse of the so-called algorithmic stablecoin triggered a wave of panic among investors and kick-started what analysts called the "crypto winter."

Kwon is faced with eight counts in relation to "orchestrating a multi-billion dollar crypto asset securities fraud" by the U.S., while prosecutors in his home country asked Interpol last year to place him on the red notice list, also in relation to the crash of Terraform's cryptocurrency. South Korea has also revoked Kwon's passport.

"A Red Notice is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action," according to Interpol.

Kwon's last known location before his arrest was in Montenegro's neighbor, Serbia. He previously said he was "not on the run" after Singapore confirmed that he was no longer in the city-state following the collapse of Terraform's UST.

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TerraUSD crashed in mid-2022, prompting U.S. and South Korea charges against the stablecoin maker's co-founder and CEO. In this photo illustration, litecoin, ripple and ethereum cryptocurrency 'altcoins' sit arranged for a photograph beside a smartphone displaying the current price chart for ethereum in London, April 25, 2018. Jack Taylor/Getty Images