Do Kwon's Extradition Appeal Rejected by Montenegro Court
Montenegro's Constitutional Court has unanimously rejected Do Kwon's appeal against extradition, closing yet another legal avenue for the Terraform Labs co-founder.
The court cited legal inconsistencies in Kwon's case, upholding an earlier ruling in favour of extradition.
Montenegro's Constitutional Court upheld the justice minister's authority on extraditing Do Kwon, co-founder of Terraform Labs, amid legal and diplomatic disputes. #Montenegro #ConstitutionalCourt #DoKwon #TerraformLabs #SouthKorea https://t.co/BGrh7Ctk8p
— The Chosun Daily (@EnglishChosun) December 26, 2024
Kwon, under global scrutiny since the $40 billion Terra Luna collapse in 2022, faces allegations of fraud and financial misconduct from both the United States and South Korea, both of which have requested his extradition.
The ruling paves the way for Montenegro's Justice Minister to finalise Kwon's extradition destination, with the US emerging as the likely choice due to the ministry's established stance.
Meanwhile, South Korean authorities continue to seek Kwon's return to face charges tied to the TerraUSD (UST) and Luna token crash.
This pivotal decision could set a significant precedent for cross-border accountability in the cryptocurrency space.
Kwon's Defense Fights Back, Noted the Ruling Violated Procedural Fairness
Kwon's legal team argued that the ruling infringed on procedural fairness and his rights to a fair trial and family life.
Montenegrin court rejects Do Kwon's constitutional appeal, faces extradition to the US
The constitutional complaint filed by Terraform Labs founder Do Kwon in Montenegro has been rejected. Do Kwon's side claimed that the extradition procedure was unfair and that there were err…
— Bpay News (@bpaynews) December 25, 2024
However, Montenegro’s Constitutional Court dismissed these claims, leaving the decision on his extradition to the Justice Minister.
Reports suggest that Montenegro may favour extraditing Kwon to the US over South Korea, with national interests potentially influencing the choice.
Despite the setback, Kwon’s legal team is expected to persist in opposing his transfer to the US, where he faces multiple charges.
Meanwhile, South Korean authorities have urged Montenegro to expedite the extradition, citing concerns about prolonged proceedings potentially leading to human rights violations.
South Korea has been actively pursuing him for his role in the collapse of the Terra ecosystem, and they have strong legal grounds to prosecute him.
Additionally, Kwon is a South Korean national which might make extradition to his home country more straightforward.#LUNC #USTC pic.twitter.com/UX5EpfEN0A
— V.s 🌕 Bull_Lunc (@vs_bull_lunc) December 25, 2024
While the exact timeline remains unclear, the court's ruling has considerably limited Kwon's legal avenues.
The Never-Ending Legal Battle
Kwon's legal turmoil traces back to the May 2022 collapse of his Terra Luna crypto ecosystem, which wiped out $40 billion in market value.
The debacle sparked investigations into fraud, market manipulation, and securities law violations, shaking investor confidence in stablecoins and decentralised finance (DeFi) while triggering global regulatory crackdowns.
Kwon was arrested in Montenegro in March 2023 while attempting to use a forged passport.
Montenegrin police officers escorting Do Kwon out of a court in Podgorica, Montenegro on March 23
In April, a US court held Terraform Labs and Kwon liable for fraud following charges by the SEC, which accused him of misleading investors and recklessly mismanaging funds.
Despite being in custody in Montenegro, Kwon did not attend the trial where the settlement was reached.
The country’s judiciary now faces the complex task of deciding on dual extradition requests from the US and South Korea, a decision likely to hinge on geopolitical considerations.
Meanwhile, Terraform Labs, operating under Chapter 11 bankruptcy protection, struggles to address the financial obligations imposed by the settlement.
According to testimony from CEO Chris Amani, the company holds $150 million in assets, but it remains unclear how it plans to meet the substantial fines.
Terraform Labs PTE, Ltd. & Do Kwon agreed to pay more than $4.5B following a unanimous jury verdict holding them liable for orchestrating a years-long fraud involving crypto asset securities that led to massive investor losses when the scheme unraveled. https://t.co/B5IeUcu7Gh pic.twitter.com/pHPrzHCB6j
— U.S. Securities and Exchange Commission (@SECGov) June 14, 2024
As Kwon awaits the Justice Minister's decision, his legal and financial challenges continue to mount, leaving a lasting impact on the crypto industry.
Montenegrin PM Partook in Terraform Labs' Investment
Controversy erupted nearly a week after Terraform Labs settled with the SEC when an April court document implicated Montenegrin Prime Minister Milojko Spajic in the crypto firm's early operations.
Spajic, who took office in October 2023, reportedly invested $75,000 in April 2018 to acquire 750,000 Terra tokens.
🚨 SEC announced that Montenegrin Prime Minister Milojko Spajic was one of the first investors of #TERRA 👀
So he had invested in old #LUNA ( #LUNC ) and #UST ( #USTC ) coins 🤔
Maybe that's why Do Kwon was detained in Montenegro for so long 😅#TerraClassic $Lunc $Ustc $Luna pic.twitter.com/osMx0zJydM
— V.s 🌕 Bull_Lunc (@vs_bull_lunc) June 19, 2024
Previously, Spajic had publicly denied any personal financial ties to the now-defunct crypto project.
However, the SEC's disclosures contradicted his claims, listing him as one of Terraform Labs' initial investors.
The revelation has raised questions about Spajic's transparency and potential conflicts of interest, further intensifying scrutiny of the embattled crypto firm.
