Montenegro’s Ministry of Justice could decide whether to extradite Terraform Labs co-founder Do Kwon to the United States or South Korea after a decision from the country’s Supreme Court.
In a Sept. 20 notice, the Supreme Court of Montenegro said it had submitted Kwon’s case to the justice minister after ruling on a request for a protection of legality. According to the high court, South Korea and the US had met the conditions for applying for Kwon’s extradition from Montenegro to face criminal charges.
How did Kwon get here?
The Terra ecosystem collapsed in 2022, one of the first dominoes to fall in a series of bankruptcies affecting crypto firms, including Celsius, FTX, and BlockFi. US and South Korean authorities filed charges against Kwon and some of his associates for their alleged role in the platform’s downfall, but the Terraform co-founder’s whereabouts were largely unknown until he surfaced in Montenegro in 2023.
Montenegrin authorities arrested Kwon for using falsified travel documents and sentenced him to four months in prison. Since his release, he has remained in legal limbo as the nation’s courts consider competing motions from Kwon’s lawyers, the South Korean government and the US government.
It’s unclear whether the Montenegrin justice minister will have the final say over Kwon’s extradition. In April, the country’s High Court in Podgorica ruled that the matter would go to then-Minister Andrej Milović, but Kwon’s legal team appealed the decision. Milović has since been replaced as justice minister by Bojan Božović.
In the US, a jury found Terraform Labs and Kwon liable for defrauding investors in a civil case with the country’s Securities and Exchange Commission. Both parties agreed to pay roughly $4.5 billion in disgorgement, civil penalties and prejudgement interest.
Related: SEC may receive ‘only a fraction’ of Terraform’s settlement
Terraform filed for Chapter 11 bankruptcy protection in the US in January. On Sept. 19, a bankruptcy judge approved the firm’s plan to wind down operations. It’s unclear whether many of the platform’s investors can expect to be made whole.
Awaiting Kwon’s potential extradition, South Korean authorities have already indicted several individuals connected to Terraform, including co-founder Hyun-seong Shin. Montenegrin authorities approved the extradition of Terraform Labs’ former chief financial officer, Han Chang-Joon, who was arrested in Montenegro at roughly the same time as Kwon, to South Korea.
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