In a major development for the ongoing investigation into the spectacular crash of Terraform Labs and its algorithmic stablecoin TerraUSD, Han Chang-joon, the company’s former chief financial officer, has been extradited to South Korea. This follows his arrest alongside co-founder Do Kwon in March 2023 in Montenegro while attempting to flee on a private jet using forged documents.
Extradition Approved: South Korea Pursues Charges
Montenegro’s Ministry of Justice authorized the extradition, allowing South Korean authorities to pursue “criminal proceedings for several criminal offenses related to fraud in financial investment services, investments and the capital market.” These charges carry a potential life sentence in South Korea.
Kwon, however, remains in Montenegro as he appeals the court’s decision to uphold his conviction for passport forgery. Both South Korea and the United States have requested his extradition in relation to the $60 billion collapse of TerraUSD in May 2022. The algorithmic stablecoin’s depegging from the US dollar triggered a domino effect, impacting major players like crypto fund Three Arrows Capital and exchange FTX.
Goran Rodic, the lawyer representing both executives, said:
“We are still waiting for the decision about Do Kwon, following our appeal.”
Han’s extradition comes after completing a separate four-month prison sentence in Montenegro for the passport forgery charge. Terraform Labs, which filed for Chapter 11 bankruptcy in the US in January, did not respond to requests for comment.
From Success To Scandal: The Terraform Downfall
The saga began in 2018 when Kwon founded Terraform Labs with Daniel Shin. Over the next four years, the company and TerraUSD gained significant traction. However, May 2022 witnessed the stablecoin’s dramatic decoupling from the dollar, leading to its implosion.
South Korean authorities issued an arrest warrant in September 2022 against Kwon and five others, accusing them of violating capital markets laws. Interpol followed up with a red notice for Kwon’s arrest soon after.
DL News journalists tracked Kwon’s movements in January 2023 following reports placing him in Serbia. Their subsequent investigation led to the arrest of Kwon and Han in Montenegro for using forged Costa Rican passports.
With Han now facing criminal proceedings in South Korea, legal experts anticipate increased pressure on Kwon to surrender or negotiate. His testimony and potential cooperation could offer crucial insights into the financial decisions and activities that contributed to the Terra ecosystem’s demise.
However, the legal path forward remains uncertain. Kwon’s extradition appeal could significantly delay resolution for both him and investors. Moreover, the outcome of these proceedings could set precedents for regulatory frameworks and accountability measures within the cryptocurrency industry.
The extradition of Han Chang-joon marks a significant milestone in the ongoing investigation into the Terraform Labs collapse. While it raises hopes for accountability and a clearer understanding of the events leading to the $60 billion implosion, the fate of Do Kwon and the ultimate legal ramifications remain to be seen.
Featured image from AP-Yonhap, chart from TradingView
