Montenegrin Court Orders Do Kwon’s Extradition to South Korea, Rejects U.S. Appeal

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...

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July 31, 2024

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Terraform Labs co-founder Do Kwon is set to be extradited from Montenegro to his native South Korea following a ruling from the Balkan nation’s court of appeals on Thursday, August 1.The decision concludes a protracted legal battle over whether he should face charges in South Korea or the United States. Both countries have sought his extradition due to the $40 billion collapse of the Terra/LUNA ecosystem in May 2022.

Is the Long-due Extradition Process Coming to an End?

Montenegro has faced dueling extradition requests from South Korea, and the U.S. South Korea’s request, which was submitted first, was given precedence by the High Court of Podgorica. The decision faced numerous challenges, including interventions from Montenegro’s Supreme Court and conflicting rulings over the months.Today, the Appellate Court of Montenegro confirmed the High Court’s decision to extradite Kwon to South Korea, rejecting the U.S. appeal. The court emphasized that South Korea’s earlier request granted it an advantage. Kwon’s lawyer, Goran Rodić, stated that Montenegro would coordinate the extradition with Interpol and hoped for a swift resolution.The Terra/LUNA collapse was the first in a series of high-profile cryptocurrency failures in 2022. Terra’s algorithmic stablecoin, UST, lost its peg to the U.S. dollar, triggering a massive sell-off that wiped out approximately $40 billion in market value.This collapse affected individual investors and contributed to a broader loss of confidence in the market, leading to further collapses, including that of FTX, the second-largest crypto exchange globally.Shortly after the Terra/LUNA crash, Do Kwon went into hiding. His whereabouts are unknown despite public appearances and statements claiming he was not evading authorities.In September 2022, Interpol issued a red notice for Kwon, effectively making him one of the most wanted fugitives in the cryptocurrency world.Kwon’s run ended in March 2023 when he was arrested at Podgorica Airport in Montenegro. He had been attempting to fly to Dubai using a fake Costa Rican passport.His business partner, Chang Joon, accompanied him. Both were sentenced to four months in prison for document forgery.Despite completing their sentences, they remained in Montenegro; Kwon was placed in a shelter for foreigners while awaiting extradition.

The fate of Terra founder Do Kwon's extradition returns to a lower court as a jury finds him guilty of fraud following the Luna crash of 2022. #Terraluna #DoKwon #Montenegrohttps://t.co/CgUBw5fbib

— Cryptonews.com (@cryptonews) April 5, 2024

After serving his sentence, Kwon was released on bail but remained in Montenegro without his real passport.

Do Kwon’s Case Moving to South Korea While Paying the SEC a $4.5B Civil Settlement

Kwon’s impending extradition marks a significant step in addressing the massive financial fallout from the Terra/LUNA collapse. In April 2023, a New York jury found Kwon and Terraform Labs liable for civil fraud, agreeing with the U.S. Securities and Exchange Commission (SEC) that they deceived investors. Terraform Labs subsequently agreed to a $4.5 billion civil settlement with the SEC. Despite this settlement, the U.S. continued to seek Kwon’s extradition for further prosecution.Kwon’s stay in Montenegro has been embroiled in the country’s political allegations, especially amid the parliamentary elections in June 2023. A letter from Kwon to then-Prime Minister Dritan Abazović and Chief Special Prosecutor Vladimir Novović implicated current Prime Minister Milojko Spajić. Kwon alleged that the crypto community had financially supported certain political parties. This claim led to an investigation by the Special State Prosecutor’s Office and statements from involved parties, including Spajić and Kwon.The final steps in these 16 months of legal battles involve coordinating with Interpol to ensure a smooth extradition process of Kwon to South Korea.

The SEC's trial against Terraform Labs founder Do Kwon is set to begin in Manhattan federal court Monday, though the former crypto tycoon will not be present.https://t.co/d0FHDHlPNm

— Cryptonews.com (@cryptonews) March 25, 2024

Meanwhile, Kwon’s trial in absentia has already commenced in the United States, and Terraform Labs has been imposed with significant financial penalties.