The Constitutional Court of Montenegro has rejected an appeal by Do Kwon, co-founder of Terraform Labs, against extradition. This decision removes an important legal hurdle in the extradition process.
According to information, this decision was completely unanimous. The court pointed out legal errors in Kwon’s appeal and affirmed the previous ruling in favor of extradition.
The case now goes to Montenegro’s Attorney General, who will decide whether Kwon will be extradited to South Korea or the United States. Report from Korea Quoc shows that the possibility of extradition to the US seems stronger, consistent with the stance of the Ministry of Justice.
Both countries want to prosecute Kwon on charges related to the collapse of the Terraform Labs cryptocurrency ecosystem, involving the TerraUSD and Luna coins. The crash in May 2022 wiped about $40 billion from the market, marking one of the biggest collapses in financial history.
Notably, the collapse of the UST stablecoin kicked off the infamous crypto “winter” of 2022. The domino effect exposed the misdeeds of other major platforms such as FTX and Celsius. This has led to increased regulatory scrutiny of stablecoins and DeFi globally.
In March 2023, Kwon was arrested in Montenegro while trying to travel with a fake passport. Due to the seriousness of the case, this extradition case is seen as a potential precedent for cross-border law enforcement related to cryptocurrency crimes.
The largest financial settlement in SEC history
In early June 2024, Terraform Labs reached a settlement with the SEC, agreeing to pay $4.47 billion. The settlement includes $3.6 billion in backlogged penalties, $420 million in civil penalties, and $467 million in prejudgment interest.
In addition, Do Kwon was also required to pay more than 200 million USD in fines. That includes $110 million in back pay penalties, $80 million in civil penalties and $14.3 million in interest.
The move comes amid reports emerging about Kwon’s political connections in Montenegro. In 2023, the country’s prime minister called for an investigation into allegations that Kwon had financial connections with a political opponent.
Kwon is said to have supported the Europe Now party, led by Milojko Spajic. This backing has raised questions about its potential impact on his extradition process.
Overall, the court’s ruling brings Kwon closer to facing justice while also highlighting the challenge of international legal coordination in the cryptocurrency sector.