South Korean cryptocurrency entrepreneur Do Kwon is to be extradited from Montenegro to the United States over the collapse of two digital tokens – TerraUSD and Luna tokens.

The United States and South Korea have been seeking Kwon’s extradition for months, claiming fraud bankrupted the company behind the token, which cost it around $40bn (£31.7bn) from investors and rocked global cryptocurrency markets.

Montenegro does not have an extradition treaty with the United States or South Korea, so the matter must be resolved in court.

The decision marks the end of more than 18 months of rulings and overturns.

“Attorney General Bojan Bozovic issued a decision approving the extradition of defendant Dao Heng Quan to the United States of America,” the Justice Department announced in a statement.

“It has been concluded that most of the criteria established by law support the request for extradition by the competent authorities of the United States of America,” the statement said.

It added that Kwon had agreed to be extradited to South Korea and the United States.

In February this year, U.S. regulators accused Kwon and his company Terraform Labs of “orchestrating a multi-billion dollar crypto asset securities fraud.”

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said: “We allege that Terraform and Do Kwon failed to provide the public with full, fair and truthful disclosures required of a range of crypto-asset securities, particularly Luna. and TerraUSD,” said in a statement at the time.

The United States accused Kwon of repeatedly claiming that the token would increase in value and misleading investors about the stability of TerraUSD.

Despite billions of dollars in investments, TerraUSD and Luna fell into a death spiral in May 2022.

It triggered a sell-off in other major cryptocurrencies, including Bitcoin.

In March 2023, Kwon was arrested at the airport in Podgorica, the capital of Montenegro, while trying to board a flight to Dubai.

In June 2023, he was sentenced to four months in prison in Montenegro for forging official documents.

Former Terraform Labs financial officer Hon Chang-joon was extradited to South Korea in February after serving four months in a Montenegro prison on fraud charges.