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Do Kwon to be Extradited to the United States and CZ Can’t Leave

Zhao will have to remain in the United States until his sentencing due to a claimed high flight risk. And Do Kwon might soon be extradited from Montenegro and join CZ in the U.S.

Despite the U.S. authorities' long-standing campaign against crypto, it seems that some industry moguls just can't keep themselves away. Binance co-founder Changpeng Zhao (CZ) is being prevented from leaving the country before his sentencing on money laundering charges, and Terra founder Do Kwon may soon join him, as Montenegran authorities have allegedly decided that he will be extradited to the U.S. rather than South Korea.

After stepping down from his post and pleading guilty to money laundering charges as a part of the exchange’s settlement agreement with the DoJ, CZ was initially released on bail and given leave to return to the UAE to his family.

However, he might still face up to 18 months in prison, and the prosecution requested that he be detained in the country until his trial takes place in February, claiming that the former CEO poses a high flight risk.

After accepting CZ's guilty plea on December 6, the Federal Judge then ruled on December 7, that Zhao must remain in the United States during the period before his sentencing, citing the unique circumstances of this case (the defendant’s wealth overseas, no ties to the U.S. and his favoured position within the UAE) as the main reason. According to the order, a bail package is inadequate to ensure CZ’s return, as he, being a multi-billionaire, can personally sustain the loss of these funds and recompense his guarantors. The Judge also doesn’t believe that the UAE government would assist in extradition if CZ chose not to return.

Thus, Zhao has become stuck in the U.S., sharing food photos and feeling bored, describing himself as “unemployed and unemployable,” but on the job market again.

Meanwhile, Do Kwon has already served some time in a Montenegran prison, with the only real question being which country's jails he is likely to sample next? We previously Observed that the courts in Montenegro had approved the extradition of the former Terraforms Labs CEO, but not indicated whether this would be to the U.S. or South Korea. Kwon had agreed to be sent to his homeland, but the final decision rested with Minister of Justice Andrej Milovic. Both countries are threatening Do Kwon with strict sentencing for multiple counts of securities fraud, wire fraud, conspiracy, violation of public offering and market manipulation.

After the collapse of Terra in May 2022, the founder and former CEO of South Korea-based Terraform Labs, Do Kwon, went on the run but was eventually detained in Montenegro. Read our summary, One Year Since the Terra Collapse for more details about the ongoing legal proceedings involving the company and its founder.

Now, The Wall Street Journal has reported that the Terraform Labs founder will be extradited to the U.S. rather than to South Korea. According to information from anonymous sources, Montenegro’s top justice official has privately said that this is the case, but the final decision has not yet been officially announced. It will allegedly be declared after the court rules on a last-ditch appeal by Kwon against the country’s extradition ruling.

Recently CZ tweeted: "Learning again, by meeting founders." Will Do Kwon be among them if he eventually ends up in the U.S.? This could be the beginning of a beautiful friendship...