Terraform co-founder Do Kwon may have to explore another legal route as Montenegro’s Constitutional Court reportedly dismissed his appeal. Korea JoongAng Daily published a report detailing the reason behind the court’s decision. First, the court is concerned about the legal inconsistencies in Kwon’s appeal.

Ordinarily, these inconsistencies effectively uphold an earlier ruling favoring his extradition. The European country’s minister of justice will have to decide whether Kwon will face trial at home or in the United States. The likelihood of getting extradited to the US seems higher.

Montenegro Appellate Court Extradite Do Kwon to South Korea

In August, the Montenegro Appellate Court confirmed its decision to extradite the Terraform Labs co-founder to South Korea. It was believed that this ended the prolonged legal battle marked by multiple appeals and judicial reversals. It turned out that the requirements for extradition requests from South Korea and the United States were met.

However, the High Court in Podgorica decided that South Korea’s request should take precedence over the U.S. This decision came amidst several complexities in Kwon’s dual extradition requests. 

Do Kwon in Trouble With Authorities 

Montenegro’s court decision will likely set a precedent for cross-border accountability in crypto. The authorities are investigating Do Kwon over allegations of fraud, market manipulation, and securities law violations. In the second quarter of 2024, one US court found Terraform Labs and Kwon liable for fraud. 

This was a case initiated by the US Securities and Exchange Commission (SEC), which charged him with misleading investors and recklessly mishandling customer funds. 

Consequently, the Commission requested approximately $4.7 billion in disgorgement and prejudgment interest. This was alongside a combined $520 million in civil penalties, $420 million from Terraform, and $100 million from Kwon. 

Terra LUNA Pulls $2 Trillion From Global Crypto Market Cap

For context, Terraform Labs faced a major downtrend in 2022 after Terra LUNA/UST rushed and left the broader cryptocurrency market, with losses running to $2 trillion. 

Since then, Kwon has been at the center of global scrutiny. His investigation cuts across the United States and South Korea, as regulators in both regions accuse him of commuting fraud.

He was initially in South Korea but was later arrested in Montenegro in March 2023, so both countries are pushing for his extradition.

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