According to local reports, Montenegro’s Justice Minister has signed an order to extradite Terraform Labs founder Do Kwon to the United States, rejecting South Korea’s extradition request. South Korean authorities accuse Kwon of misleading investors and hiding assets.
This decision follows a ruling by the Supreme Court of Montenegro, which confirmed that the legal requirements for extradition had been met.
Do Kwon to face trial in US
An extradition to the US was likely after a Montenegro court rejected Do Kwon's appeal against extradition, citing legal flaws in his case.
Although an extradition date has not yet been set, Kwon will likely face a trial similar to that of Sam Bankman-Fried. The FTX founder is currently serving a 25-year sentence, and was also extradited from the Bahamas. However, his extradition was much less complicated than Kwon's.
Taking into account the Supreme Court's decision, the Ministry of Justice reviewed all the facts and circumstances and assessed criteria such as the gravity of the crimes, the place where they occurred, the nationality of the requested individual, as well as other circumstances. Based on this, it was concluded that most of the criteria stipulated by law favor the request for extradition by the competent authorities of the United States, the Ministry of Justice said in its announcement.
The founder of Terraform Labs is under investigation in both the US and South Korea for his role in a major cryptocurrency collapse in May 2022.
At the time, the collapse of TerraUSD and Luna wiped $40 billion from the crypto market and triggered a widespread financial crisis, leading to the bankruptcy of several companies in the sector.
Additionally, authorities allege that Kwon misled investors and suspect that he hid significant assets. In March 2023, Kwon and his business partner, Han Chong Jun, were arrested at Podgorica Airport in Montenegro while attempting to board a flight to Dubai using fake passports.
Kwon was sentenced to four months in prison in Montenegro. However, he is currently being held at the Spuž Foreigners Reception Center.
Historic Settlement with the SEC
In June 2024, Terraform Labs reached a landmark settlement with the SEC, agreeing to pay $4.47 billion in penalties. The settlement included $3.6 billion in disgorgement penalties, a $420 million civil penalty, and $467 million in prejudgment interest.
Additionally, Kwon was personally ordered to pay more than $200 million, including $110 million in restitution, $80 million in civil penalties, and $14.3 million in interest.
Controversy has also arisen around Kwon's alleged political connections in Montenegro. Reports suggest he may have financial ties to local political figures, including Milojko Spajic, leader of the Europe Now party.
Overall, these connections have raised concerns about potential interference in the extradition process. In 2023, Montenegro’s prime minister called for an investigation into these allegations, adding another layer of complexity to the case.
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