Montenegro's Top Court Decision Sparks Potential Extradition of Do Kwon to US

Terraform Labs Pte. co-founder Do Kwon, a figure wanted by authorities in South Korea and the US and currently detained in Montenegro, could potentially face trial in New York following the reversal of previous decisions by the Balkan nation’s Supreme Court, which had initially ruled against extraditing him to his home country.

In the event of conflicting extradition requests, the country’s justice minister will ultimately determine the destination for the suspect after the courts establish whether the extradition conditions are satisfied, as stated by the Supreme Court in a Friday announcement. The case has been referred back to the High Court in Podgorica for legal evaluation, as reported by Bloomberg.

The highest court in the Balkan nation, with a population of 620,000, acted in response to Montenegro’s chief prosecutor contesting Kwon’s extradition to South Korea, citing procedural flaws in the previous ruling. While Kwon’s legal team has advocated for extradition to South Korea, where penalties for financial crimes are typically less severe than in the US, Montenegro's government reportedly favors extradition to the US, according to a Bloomberg report in late February.

Following his arrest in Montenegro a year ago for using a counterfeit passport, Do Kwon, who had been in hiding since the collapse of his TerraUSD stablecoin worth $40 billion in 2022, has become embroiled in a legal battle within Montenegro’s jurisdiction. The country’s justice ministry contends that Kwon should be extradited to the US, whereas the courts have ruled in favor of extradition to South Korea. Throughout this legal struggle, the US Department of Justice has persistently advocated for his extradition.

“The United States continues to seek Kwon’s extradition in accordance with relevant international and bilateral agreements and Montenegrin law,” the Justice Department said in a March 7 statement, following a ruling to send Kwon to South Korea. “The United States appreciates the cooperation of the Montenegrin authorities in ensuring that all individuals are subject to the rule of law.”

Kwon was released from custody in late March after the completion of his sentence for the offense committed in Montenegro. However, his passport remains confiscated, and he has been relocated to a facility for foreign nationals as he awaits a resolution on his extradition status.

Terraform Labs and its Co-founder Found Liable for Fraud in SEC Trial

Meanwhile, Terraform Labs Pte. and its co-founder Do Kwon were found liable for fraud in a US government lawsuit over the firm’s 2022 collapse. Following a two-week trial in New York, a jury concluded on Friday that Kwon and Terraform had deceived investors, providing a notable victory for the US Securities and Exchange Commission (SEC) in its endeavors to assert greater control over the cryptocurrency industry.

This verdict may also serve as a preview of impending criminal proceedings against Kwon in both the US and South Korea, although meeting the criminal standard for guilt poses a higher bar.