Kwon is facing fraud charges related to the collapse of the UST stablecoin.

Do Kwon, the founder and former CEO of Terraform Labs, will be extradited to the United States to face fraud charges after a new Montenegrin High Court ruling, according to a report in local newspaper Pobjeda. 

In late December, the High Court of Podgorica ruled for the second time that all conditions had been met for Kwon’s extradition. On Feb. 7, however, the Court of Appeals in Montenegro reversed that decision, saying the High Court’s decision had unclear wording and was missing justifying facts. The appeals court then turned the matter back to the High Court to decide whether Kwon should be extradited to the United States or South Korea. 

Kwon and former Terraform Labs CFO Han Chang-Joon were arrested in Podgorica in March 2023 while trying to board a plane to Dubai using falsified travel documents and sentenced to four months in prison. While he’s in custody, Montenegro has to approve the extradition and the location. 

Read more: Terraform Labs, Do Kwon Sold Unregistered Securities, U.S. Judge Rules

Prosecutors from the U.S. Department of Justice (DOJ) quickly brought criminal charges against Kwon for his role in the Terra ecosystem collapse, and he faces civil charges from the U.S. Securities and Exchange Commission (SEC). South Korean authorities have also accused Kwon and his associates of defrauding investors by falsely promoting the TerraUSD (UST) stablecoin. Han Chang-Joon was extradited to South Korea in February. 

The Terra ecosystem collapsed in May 2022 when UST, then an $18 billion algorithmic stablecoin, lost its peg to $1. LUNA, the sister coin meant to stabilize UST’s price, plunged from $80 to a few cents in a matter of days. The shockwave caused damage throughout the crypto industry, including the collapse of crypto hedge fund Three Arrows Capital. Singapore-based Terraform Labs surprisingly didn’t file for its own Chapter 11 bankruptcy protection until Jan. 2024.