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Montenegro’s Constitutional Court rejected Do Kwon’s extradition appeal, supporting the requests from the United States and South Korea.
The court’s decision closed another legal route for Terraform Labs co-founder Kwon, dismissing his appeal due to legal inconsistencies.
Kwon has been at the center of global investigations since the collapse of his crypto empire in 2022. The United States and South Korea accuse him of fraud and other financial crimes related to the $40 billion Terra Luna crash. Both countries have requested his extradition.
The Montenegro court’s ruling means Kwon’s legal fate remains uncertain, as the international extradition case could set a precedent for cross-border accountability in the crypto space.
The Ongoing Legal Battle Since the Terra Luna Collapse
Kwon’s legal battle began after the collapse of his crypto ecosystem, Terra Luna, in May 2022, wiping out approximately $40 billion in market value.
The event triggered investigations into allegations of fraud, market manipulation, and violations of securities laws. Kwon was arrested in Montenegro in March 2023 while attempting to use a fake passport.
Considered one of the most significant events in crypto history, the collapse of the Terra Luna ecosystem shook investor confidence in stablecoins and decentralized finance (DeFi), leading to increased regulatory crackdowns worldwide.
In April, a U.S. court found Terraform Labs and Kwon liable for fraud in a case initiated by the U.S. Securities and Exchange Commission (SEC), accusing them of knowingly misleading investors and recklessly handling customer funds.
Since his arrest, the Montenegrin judiciary has been dealing with the complexities of Kwon’s dual extradition requests, with the decision expected to have a significant impact on the geopolitical dynamics between the U.S. and South Korea.
The Terraform-SEC Lawsuit
In June, Terraform Labs agreed to pay approximately $4.47 billion as part of its settlement with the SEC. This included $3.6 billion in disgorgement fines, a $420 million civil penalty, and about $467 million in pre-judgment interest.
According to the settlement plan, Kwon was fined $110 million in disgorgement, $80 million in civil penalties, and approximately $14.3 million in pre-judgment interest.
Montenegrin Prime Minister’s Involvement with Terraform Labs
Almost a week after Terraform Labs‘ settlement with the SEC, findings from an April court document sparked controversy regarding the involvement of Montenegrin Prime Minister Milojko Spajić with the crypto firm.
According to a report from Montenegrin media outlet Vijesti, Spajić, who took office in October 2023, had invested $75,000 to purchase 750,000 Terra tokens from the firm in April 2018.
Until the SEC disclosed the documents, Spajić had claimed that he had never personally invested in the collapsed crypto project. However, the documents revealed his name on the list as one of the first investors of Terraform Labs, disproving this claim.
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