Latest Update on Terraform Collapse: Former CFO Extradited, Awaits Determination of Do Kwon’s Destiny

Former CFO of Terraform Labs, Han Chang-joon, has been extradited from Montenegro to South Korea in an unexpected turn of events. Han was arrested alongside Terra co-founder Do Kwon in March 2023 for attempting to travel with falsified documents. The Ministry of Justice in Montenegro approved the extradition request, officially handing Han over to South Korean authorities.

Han Chang-joon now faces charges in South Korea related to fraud in financial investment services, investments, and the capital market. These charges carry the potential for a life sentence. Meanwhile, Do Kwon remains in custody in Montenegro, and the Ministry of Justice has yet to decide whether he will be sent to the US or South Korea. Both countries are seeking his transfer due to criminal charges associated with the collapse of Terraform Labs in May 2022.

In a surprising turn of events in December, Montenegro’s appeals court canceled the approved extradition of Do Kwon to South Korea and the US. The Securities and Exchange Commission (SEC) had charged Terraform Labs and the former CEO in February, leading to a $40 billion loss for investors. South Korean prosecutors also leveled similar charges.

To combat the SEC lawsuit, Terraform Labs has taken a strategic step by filing for bankruptcy. Typically, challenging the SEC would require posting a “supersedeas bond” equivalent to 110% of the total judgment before proceeding with an appeal. However, by invoking Chapter 11 bankruptcy protections, Terraform Labs aims to navigate this process without the immediate financial burden of posting such a large bond. This move is intended to handle legal challenges more effectively.

The question remains whether the extradition proceedings will take a new turn or if Terraform Labs will weather the storm through bankruptcy. Only time will tell.