The fate of Do Kwon, co-founder of Terraform Labs, hangs in the balance as Montenegro’s High Court prepares to decide whether he will be extradited to the United States or South Korea. This decision follows another successful appeal by Kwon’s legal team, further delaying his transfer.
Also Read: US SEC and Montenegrin Justice Minister Meet to Discuss Do Kwon
Kwon faces serious criminal charges in both countries, making this a critical moment in his legal battle. Montenegro’s High Court is now tasked with reviewing his extradition after the country’s court of appeals accepted arguments from Kwon’s lawyers. The appeal is a legal strategy meant to delay his transfer.
Montenegro High Court Will Decide Kwon’s Fate
According to a May 24 report from a Montenegrin news outlet, the court of appeals sent the matter back to the High Court for retrial and decision. “If the person whose extradition is sought gives his consent to extradition, it is a shortened procedure that has to be applied and in which case the court decides on extradition,” Montenegro’s appellate court reportedly said in its decision. They added:
The first-instance court was obliged to hear the defendant again while ensuring the fulfilment of guarantees that the person whose extradition is sought gave consent voluntarily, was aware of its consequences, and that the given consent cannot be revoked.
Kwon was arrested in Montenegro in March 2023 for using falsified travel documents while attempting to leave the country. Initially sentenced to four months in prison, Kwon was later released as courts considered competing requests for his extradition from the U.S. and South Korea.
U.S. Court Schedule Kwon’s Hearing for May 29
In April, a U.S. court found Terraform Labs and Kwon liable for fraud in a civil case brought by the Securities and Exchange Commission (SEC). A judge is scheduled to hear proposed remedies from both parties in a May 29 hearing.
Also Read: Terraform Labs vs SEC; Trial Begins without Do Kwon
The ongoing legal battle in Montenegro leaves Kwon in a state of uncertainty. It is unclear whether he will be able to assist in his defense (in person) in the U.S. or his native South Korea. Extradition to South Korea would mean Kwon faces an indictment for fraud and violations of capital markets law.
U.S. Has Been Working With Montenegro
Montenegro’s Government reported that Justice Minister Andrej Milović had discussed the investigation into Do Kwon with officials from the United States Securities and Exchange Commission (SEC). In a May 22 notice, Montenegro’s government stated that Milović had met with SEC personnel, including Enforcement Director Gurbir Grewal.
Depending on the court rulings, Milović will be the one to ultimately decide whether the Terraform co-founder is sent to the U.S. or South Korea. The SEC has proposed that the co-founder and Terraform pay roughly $5.3 billion in “disgorgement, prejudgment interest, and civil penalties.”
Terraform Labs collapsed in 2022 following the instability of its algorithmic stablecoin, TerraUSD (UST). This collapse led to some massive financial losses and legal consequences. In January 2023, Terraform Labs filed for bankruptcy in the U.S., reporting up to $500 million in estimated liabilities and assets.
Cryptopolitan reporting by Jai Hamid
