Do Kwon, the co-founder and ex-CEO of Terraform Labs, notched a minor victory on Tuesday when the Montenegrin Appeals Court quashed last month’s Supreme Court decision that would have seen him deported to the United States to face fraud charges.
Do Kwon Wins Appeal
The legal saga around Do Kwon’s extradition continues after the Montenegro Court of Appeals overturned his deportation to the United States, accepting the appeal made by the beleaguered South Korean crypto entrepreneur’s defence team.
A lower Montenegrin court first ruled in December that Kwon should be deported to the U.S., as opposed to his home country, South Korea, where he is also facing a multitude of criminal charges for his role in the $40 billion implosion of Terra cryptocurrencies TerraUSD and LUNA. After Kwon’s lawyers appealed that ruling, the Appellate Court of Montenegro declared that the first ruling was deeply flawed and annulled it.
A few weeks later, the High Court of Podgorica again decided that the fallen crypto star should be extradited to the US. And today, the panel of the Appellate Court voided the extradition approval for the third time, indicating that it was based on flawed logic, serious procedural violations, and an utter disregard for existing rules.
The Appeals Court also questioned the lower court’s conclusion that the U.S. requested Kwon’s extradition from Montenegro — where he served a four-month jail sentence for possessing falsified official documents — before South Korea did. Although the High Court found that American authorities requested Kwon’s deportation in March 2023 a day earlier than their South Korean counterparts, the Appellate Court determined today that South Korea’s request in fact preceded America’s by a number of days, as per email records.
Kwon’s former CFO at Terraform, Han Chang-Joon, was extradited to South Korea by Montenegrin authorities early last month. The latest legal win for Kwon doesn’t mean he won’t be extradited. The case will be returned to the first-degree court for a new hearing. As such, his extradition has been delayed for now, not cancelled.
Kwon vs. SEC
Kwon’a extradition has been sought by the U.S. and his native South Korea after the blow-up of Terraform Labs’ algorithmic stablecoin UST in May 2020, which caused losses that reverberated far and wide. The U.S. Securities and Exchange Commission (SEC) lodged a lawsuit against him for his alleged orchestration of a multi-billion dollar fraud scheme.
Additionally, the Southern District of New York’s U.S. Attorney’s Office has brought forward criminal charges against the South Korean national.
Kwon’s SEC trial is scheduled to start on March 25 without him present amid delays in his extradition from Montenegro.
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