Terra Founder Do Kwon Wins Appeal Against US Extradition

Terraform Labs co-founder Do Kwon has won an appeal against his extradition to the United States. The Montenegro Court ruling is a dramatic turn of events that has added another chapter to the ongoing saga surrounding the embattled executive.

On March 5, the Appellate Court of Montenegro in delivering its verdict, reversed the High Court of Podgorica’s decision to extradite Kwon, citing “significant violations of criminal procedure provisions” as the basis for nullifying the extradition order and emphasizing procedural irregularities in the initial judgment.

Montenegrin news outlet Pobjeda, on February 21 reported that the High Court of Podgorica rejected a request to extradite Kwon to South Korea, opting instead to send the disgraced entrepreneur to the United States.

Legal Battle on Extradition

However, the latest ruling marks a significant development in Kwon’s extradition process, which has been mired in legal complexities since his arrest in Montenegro in March 2023. Both the U.S. and South Korea have sought Kwon’s extradition, leading to contentious debates over his fate.

The Appellate Court of Montenegro has intervened in Kwon’s extradition proceedings before. In December 2023, the court reversed a prior extradition authorization, advocating for a new trial at the Podgorica Basic Court.

The court had emphasized that the authority to decide on Do Kwon’s extradition lies exclusively with the nation’s Minister of Justice.

Terraform Labs and the Allegations of Fraud

The extradition dispute involving Kwon originates from accusations of fraud concerning Terraform Labs and its primary Terra blockchain. The U.S. Securities and Exchange Commission (SEC) alleges that Terraform Labs and Kwon masterminded a deceptive scheme leading to significant market losses, estimated to be at least $40 billion.

Uncertainty Looms in Kwon’s Extradition Process

Although Kwon’s extradition appeal victory marks a temporary reprieve, the legal battle is far from over. The final decision on his extradition now rests with the minister of justice of Montenegro, adding another layer of uncertainty to an already complex situation.

The collapse of Terra’s stablecoin and the associated LUNA coin in May 2022 sent shockwaves through the crypto market, prompting regulatory scrutiny and legal action against Kwon and his company. Stakeholders are keen to see how the legal processes to make Kwon accountable unfold.