Montenegro сourt rejects Do Kwon appeal and opens door for extradition
The final decision is up to the Minister of Justice
The Constitutional Court of Montenegro has unanimously dismissed an appeal by Terraform Labs co-founder Do Kwon, effectively supporting his extradition to the United States or South Korea.
According to Korea JoongAng Daily, the court cited legal inconsistencies in Kwon's appeal, upholding an earlier decision favoring his extradition. This likely sets the stage for Kwon, accused of fraud linked to the May 2022 collapse of TerraUSD and Luna cryptocurrencies, to be sent to one of the two requesting nations.
Since Kwon’s arrest in March 2023 for using a forged Montenegrin passport, the country’s authorities have faced the complexities of handling dual extradition requests. The decision is expected to not only influence U.S.-South Korea relations but also establish a precedent for cross-border accountability in cryptocurrency-related legal cases.
Extradition decision may establish an international legal precedent
The final decision on Kwon’s destination lies with Montenegro's Minister of Justice. Sources close to Korea JoongAng Daily suggest the U.S. as the likely recipient.
In April, a U.S. court held Terraform Labs and Do Kwon liable for fraud following a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). Kwon was accused of deliberately misleading investors and recklessly mismanaging client funds.
In June, Terraform Labs agreed to pay approximately $4.47 billion to the SEC as part of a settlement. The penalties include $3.6 billion in disgorgement, a $420 million civil penalty, and $467 million in prejudgment interest. Kwon is personally accountable for $110 million in illicit gains, including an $80 million civil penalty and $14.3 million in interest.
Political implications for Montenegro’s Prime Minister
The decision could also impact the political career of Montenegro’s Prime Minister, Milojko Spajić. According to local outlet Vijesti, Spajić allegedly invested $75,000 in 2018 to purchase 750,000 Terra LUNA tokens.
While Spajić has denied personal investment in the failed cryptocurrency project, SEC-revealed documents from Terraform Labs list his name among its early investors, raising potential political repercussions.
Amid criticism of the U.S. Securities and Exchange Commission's (SEC) aggressive stance towards the crypto industry, the agency has reported enforcement penalties for 2024.In the current fiscal year, the SEC set a record by imposing $8.2 billion in fines, despite initiating 26% fewer enforcement cases (583) compared to the previous year.
The $4.5 billion judgment against Terraform Labs accounted for 56% of the total penalties issued by the SEC.
