The extradition case of Do Kwon, the co-founder of the cryptocurrency firm Terraform Labs, to the U.S., has taken a new turn.
An appeals court in the Balkan country of Montenegro has overruled an earlier decision of the High Court in Podgorica to extradite Kwon to the U.S. and decided to send the case back to the trial court after accepting Kwon’s appeal. The appeals court cited a severe violation of the Criminal Procedure Act by the High Court for its decision, but the specific grounds remain disclosed.
As a result, the High Court must reconsider the destination for Kwon’s extradition, introducing the possibility of him being extradited to South Korea. Should the High Court favor the U.S. extradition, Kwon will likely appeal again.
Earlier, Kwon’s legal representative in Montenegro, Goran Rodic, appealed that the Montenegrin government should have taken into account the timing of expedition requests from both the U.S. and South Korea, along with Kwon’s nationality. Rodic claimed Kwon’s expedition to Korea, citing his nationality and Korea’s earlier request for extradition on Mar. 29 last year, preceding the U.S. request on April 3 of the same year.
Kwon faces accusations of persistently issuing TerraUSD and Luna, the cryptocurrencies issued by his company, without disclosing the potential risk of collapse to the investors. Once ranked among the top 10 global crypto markets, the company took a downturn when its valuation had disintegrated by 99.99% to a few cents in just a week in mid-May 2022, leading to a market loss of around $40 billion.
U.S. Securities and Exchange Commission (SEC) filed a civil case against Kwon and his company Terraform Labs in February 2022 over orchestrating a multi-million dollar cryptocurrency securities fraud. A month later, federal prosecutors in New York indicted Kwon on eight charges, including fraud and market manipulation.
Prior to the collapse of Terraform Labs’ TerraUSD and Luna coins, Kwon went into hiding in Singapore in April 2022. Kwon reportedly traveled through the United Arab Emirates (UAE) and Serbia before reaching Montenegro. His arrest occurred in March 2023 at the Podgorica airport while attempting to board a private jet to Dubai using a fake Costa Rican passport.
While both the U.S. and South Korea are seeking Kwon’s extradition, the appeals court in Montenegro holds the key to deciding the destination for Kwon’s extradition based on their criteria.
Victims of TerraUSD and Luna coins have requested Kwon’s extradition to the U.S., hoping for a severe sentence. In Korea, economic crimes carry a maximum sentence of 40 years, whereas in the U.S., where sentences for individual crimes accumulate, Kwon could potentially face a sentence exceeding 100 years.
