According to local reports, Montenegro’s Minister of Justice has signed an order to extradite Terraform Labs founder Do Kwon to the United States, rejecting South Korea’s request for extradition. South Korean authorities accuse Kwon of misleading investors and concealing assets.
This decision follows a Supreme Court ruling in Montenegro, which confirmed that legal requirements for extradition had been satisfied.
Do Kwon To Face Trial in the US
Earlier this week, BeInCrypto reported that a US extradition was likely after Montenegro’s court dismissed Do Kwon’s appeal against extradition, citing legal flaws in his case.
While the extradition date isn’t final yet, Kwon will likely face a trial similar to Sam Bankman-Fried. The FTX founder is currently serving a 25-year sentence, and he was also extradited from the Bahamas. However, his extradition was far less complicated than Kwon’s.
“Taking into account the Supreme Court’s ruling, the Ministry of Justice reviewed all facts and circumstances and assessed criteria such as the severity of the criminal offenses, the location of their commission, the nationality of the requested individual, as well as other circumstances. Based on this, it was concluded that the majority of the criteria stipulated by law favor the request for extradition by the competent authorities of the United States,” stated the Ministry of Justice in its announcement.
The Terraform Labs founder is under investigation in both the US and South Korea for his role in a major cryptocurrency collapse in May 2022.
At that time, the crash of TerraUSD and Luna erased $40 billion from the crypto market. It triggered a widespread financial fallout, leading to the bankruptcy of several companies in the sector.
Furthermore, authorities allege that Kwon deceived investors and suspect he concealed significant assets. In March 2023, Kwon and his business partner, Han Chong Jun, were arrested at Podgorica Airport in Montenegro while attempting to board a flight to Dubai using fake passports.
Kwon was sentenced to four months in prison in Montenegro. However, he is currently detained at the Spuž Centre for Reception of Foreigners.
“Extraditing him to the US could have major implications for how international crypto fraud cases are handled. It’s interesting to see how justice systems across borders interact in these high-profile cases,” author Anndy Lian wrote on X (formerly Twitter).
Historic Settlement with the SEC
In June 2024, Terraform Labs reached a historic settlement with the SEC, agreeing to pay $4.47 billion in penalties. The settlement included $3.6 billion in disgorgement fines, a $420 million civil penalty, and $467 million in pre-judgment interest.
Also, Kwon was personally ordered to pay over $200 million, including $110 million in disgorgement, $80 million in civil penalties, and $14.3 million in interest.
Controversy has also emerged surrounding Kwon’s alleged political connections in Montenegro. Reports suggest he may have financial ties to local political figures, including Milojko Spajic, leader of the Europe Now party.
Overall, these connections raised concerns about potential interference in the extradition process. In 2023, Montenegro’s prime minister called for an investigation into these claims, adding another layer of complexity to the case.
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