The sun has set down on Do Kwon, and it’s not a fun affair. Sources present in court have informed Cryptopolitan that Do Kwon will remain behind bars for a while. According to reports, Do Kwon is to remain in Montenegro custody for six months while the country’s courts consider an extradition request from South Korea.
All goes against Do Kwon favor
In March, the South Korean national and colleague Terra executive Han Chang-Joon were arrested in Montenegro for allegedly possessing forged documents. South Korean officials were already on the hunt for Do Kwon, and after his detention, both South Korea and the United States requested his extradition. Kwon is also facing potential imprisonment in Montenegro for document forgery.
A few hours ago, Do Kwon appeared in court, and here is part of his footage. What remains clear is that Montenegro’s judicial system is taking crypto crimes seriously as compared to SEC.
Cryptopolitan’s exclusive court footage: High Court of Montenegro.
Kwon is additionally expected to be questioned by the Office of the Special State Prosecutor regarding his connections to politician Milojko Spaji. Do Kwon claimed to have communicated with Europe Now party leader Spaji in a letter he sent to multiple officials just days before the most recent round of elections in Montenegro.
The alleged relationship between Spaji and Do Kwon, as well as the possibility of financial contributions from Kwon, were extensively covered by national news outlets despite Spaji’s denials.
The attorneys for Kwon and Chong-joon initially received approval for their proposed 400,000 euro ($436,000) bail for each individual. However, this decision was reversed on appeal prior to the dismissal of the appeal.
The United States takes a regulatory bite off of Kwon
Additionally, the United States has requested Kwon’s extradition to face charges brought by federal prosecutors and the Securities and Exchange Commission. Douglas Henkin, a lawyer from Dentons representing Terraform, argued:
The SEC only wants one word to have any meaning. They want to delete the word ‘contract.
Douglas Henkin
The attorneys for Terraform Labs and co-founder Do Kwon, Dentons, assert vehemently that the algorithmic stablecoin UST (now USTC) is not a security because it was designed for practical purposes rather than as an investment contract.
Additional documents were submitted in support of the motion to dismiss the lawsuit. It consists of the US House Financial Services Committee hearing on digital asset regulation and stablecoin issuance, the SEC’s request for a restraining order against Binance.US, and the Hinman emails in the SEC v. Ripple lawsuit.
As the US Congress discusses regulatory frameworks for the issuance of digital assets and stablecoins, attorneys refer to a “regulatory gap” regarding whether crypto assets are securities. In addition, the SEC acts outside the bounds of securities statutes and internal emails on “investment contract” to identify a security.
A South Korean court established in April that Terra Classic (LUNC) is not a security and that Terra crypto assets are not “investment contracts.” The expectations of investors and the economic realities surrounding the UST token led the SEC to conclude that securities violations had occurred.
Do Kwon was previously represented by Dentons to contest the US SEC subpoena in its investigation of the Mirror Protocol in 2021, as well as a class action lawsuit in the Singapore High Court in 2022. The law firm represents Terra in additional cases. Terraform Labs and Do Kwon retained the services of the largest law firm in the world, Dentons, to assist with the prosecution and investigation by US federal prosecutors.
