Montenegrin Court Upholds Earlier Ruling Favoring Extradition
The Constitutional Court of Montenegro has reportedly dismissed an appeal by Korean cryptocurrency mogul Do Kwon regarding his extradition, effectively closing off another legal route for the Terraform Labs co-founder. The unanimous court decision cited legal inconsistencies in Kwon’s appeal, upholding an earlier ruling favoring his extradition.
Background on Do Kwon and Terra Luna Collapse
Do Kwon has been at the center of global investigations since the collapse of his crypto empire in 2022. His ecosystem, Terra Luna, collapsed in May 2022, erasing about $40 billion in market value. The event sparked investigations into allegations of fraud, market manipulation, and securities law violations. Kwon was arrested in Montenegro in March 2023 while attempting to use a forged passport.
Ongoing Legal Battle
Kwon’s legal battle began after the collapse of the Terra Luna ecosystem, which shook investor confidence in stablecoins and decentralized finance (DeFi), prompting regulatory crackdowns worldwide. In April, a US court found Terraform Labs and Kwon liable for fraud in a case initiated by the US Securities and Exchange Commission (SEC). The SEC charged him with knowingly misleading investors and reckless mishandling of customer funds.
Dual Extradition Requests
Since his arrest, the Montenegro judiciary has been dealing with the complexities of Kwon’s dual extradition requests. The decision is expected to weigh heavily on geopolitical dynamics between the US and South Korea.
Terraform-SEC Lawsuit Settlement
In June, Terraform Labs agreed to pay the SEC about $4.47 billion as part of its settlement. This included disgorgement fines of around $3.6 billion, a $420 million civil penalty, and almost $467 million in pre-judgment interest. Kwon was found liable for $110 million in disgorgement fines, $80 million in civil penalties, and about $14.3 million in pre-judgment interest fines.
Controversy Surrounding Montenegrin Prime Minister’s Involvement
Almost a week after the Terraform Labs settlement with the SEC, findings from an April court document sparked controversy regarding the involvement of Montenegrin Prime Minister Milojko Spajic with the crypto firm. A report from the Montenegrin media outlet Vijesti said that Spajic had invested $75,000 to purchase 750,000 TerraLUNA tokens from the firm in April 2018.
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