Montenegro’s court rejects Do Kwon’s appeal against extradition over legal discrepancies.
Do Kwon faces fraud charges linked to the $40 billion Terra Luna market collapse.
Extradition ruling follows global investigations into Terra Luna’s 2022 failure.
The Constitutional Court of Montenegro has dismissed an application by Terraform Labs co-founder Do Kwon against his extradition ruling. As a result of legal discrepancies in Kwon’s filing, the decision upholds an earlier judgment in the extradition case. Kwon is accused of fraud related to the 2022 Terra Luna fiasco, which saw $40 billion erased from the market and investigations opened worldwide.
Arrest in Montenegro
Kwon was arrested in March 2023 in Montenegro when he tried to travel with a fake passport. He faces allegations of fraud, market manipulation, and securities violations, prompting extradition requests from both South Korea and the United States. The extradition has been delayed several times owing to the difficulties in managing simultaneous extradition requests from two big jurisdictions.
The Terra Luna collapse is seen as one of the worst incidents in the world of cryptocurrencies. The collapse of its blockchain project created doubts about the stability of stablecoins and decentralized finance (DeFi). After the event, global regulators increased the focus on regulating the cryptocurrency industry. Kwon has been accused of mismanagement and fraud in these regulatory crackdowns.
In April, a U.S. court decided that Terraform Labs and Kwon were fraudsters. The regulator accused Kwon of fraud and misappropriation of customer assets. Terraform Labs settled for the penalties of $4.47 billion, while Kwon personally was ordered to pay over $200 million. These legal outcomes demonstrate the extent of the Terra Luna crash.
Prime Minister Connection
Montenegrin Prime Minister Milojko Spajic was associated with Terraform Labs in the reports. The report revealed that Spajic bought Terra tokens worth $75,000 in 2018 despite his previous denial of investing. The disclosures have heightened public and media attention to the case.
The Montenegrin judicial system will decide on Kwon’s extradition. The conflicting applications from South Korea and the United States will most probably shape further legal actions. Kwon is still held in Montenegro, and the authorities are still investigating the case.
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