Montenegro court rejects Do Kwon’s extradition appeal

Montenegro’s Constitutional Court reportedly dismissed an appeal by Korean cryptocurrency mogul Do Kwon regarding his extradition, closing off another legal route for the Terraform Labs co-founder.

According to a report by Korea JoongAng Daily, the unanimous court decision cited legal inconsistencies in Kwon’s appeal, effectively upholding an earlier ruling favoring his extradition.

Kwon has been at the center of global investigations since the collapse of his crypto empire in 2022, with United States and South Korean authorities accusing him of fraud and other financial crimes linked to the $40 billion Terra Luna crash. Both countries have requested his extradition.

The Montenegro court’s decision means that Kwon’s legal fate hangs in the balance as the international extradition case will potentially set a precedent for cross-border accountability in crypto.

Related: Montenegro halts Do Kwon’s extradition again ahead of appeal ruling

Ongoing legal battle since Terra Luna collapse

Kwon’s legal battle began after his crypto ecosystem, Terra Luna, collapsed in May 2022, erasing about $40 billion in market value.

The event sparked investigations into allegations of fraud, market manipulation and securities law violations. Kwon was arrested in Montenegro in March 2023 while attempting to use a forged passport.

Considered one of the most significant events in crypto history, the collapse of the Terra Luna ecosystem shook investor confidence in stablecoins and decentralized finance (DeFi), prompting regulatory crackdowns worldwide.

In April, a US court found Terraform Labs and Kwon liable for fraud in a case initiated by the US Securities and Exchange Commission (SEC) that had charged him with knowingly misleading investors and reckless mishandling of customer funds.

Since his arrest, the Montenegro judiciary has been dealing with the complexities of Kwon’s dual extradition requests, with the decision expected to weigh heavily on geopolitical dynamics between the US and South Korea.

Related: Do Kwon’s extradition case goes back to Montenegrin justice minister

Terraform-SEC lawsuit 

In June, Terraform Labs agreed to pay the SEC about $4.47 billion as part of its settlement. This included disgorgement fines of around $3.6 billion, a $420 million civil penalty and almost $467 million in pre-judgment interest.

Kwon, per the settlement plan, was found liable for $110 million in disgorgement fines, $80 million in civil penalties and about $14.3 million in pre-judgment interest fines.

Related: Terraform wallet moves $62M BTC as Do Kwon remains in legal limbo

Montenegrin PM involvement with Terraform Labs

Almost a week after the Terraform Labs settlement with the SEC, findings from an April court document sparked controversy regarding the involvement of Montenegrin Prime Minister Milojko Spajic with the crypto firm.

A report from the Montenegrin media outlet Vijesti said that Spajic, who entered office in October 2023, had invested $75,000 to purchase 750,000 Terra (LUNA) tokens from the firm in April 2018.

Until the SEC disclosed the documents, Spajic claimed he had never personally invested in the collapsed crypto project. This was proved false when the documents revealed his name on a list as one of the first investors of Terraform Labs.

Magazine: 5 real use cases for useless memecoins