Terraform Labs Co-Founder Do Kwon Extradition’s Verdict Reversed Once Again

[TL; DR]

Once again, the Montenegrin Appellate Court has cancelled Kwon’s extradition order to the United States.

The United States has given Montenegro up to 24 March to finalize Kwon’s extradition case.

Do Kwon and the US SEC have filed motions for summary judgement of the SEC vs. Kwon case.

Introduction

The trial of Do Kwon, Terra Luna founder, in the United States has been delayed due to technical hinges. Specifically, Montenegro has not yet finalized the extradition process due to legal hurdles. For example, on a number of occasions Do Kwon’s legal team has challenged the issuance of the extradition order. In this article, we focus on the recent reversal of Kwon’s extradition verdict.

Do Kwon Secures Stay in Montenegro as High Court’s Extradition is Decision Questioned

Do Kwon beats extradition to the United States again as the Montenegrin Appellate Court overturned the extradition ruling. In a February 7, 2023, session the Montenegrin Court of Appeal accepted the appeal which Do Kwon’s defense filed with it.

The court reversed the decision which the High Court in Podgorica made on 29 December 2023. Therefore, Do Kwon’s case will go back to the first-instance court for a retrial. In the previous court session, the Higher Court in Podgorica gave an extradition order based on the conclusion that all the required conditions were met.

It based its decision on South Korea’s various criminal charges against Kwon as well as the United States pleas to Montenegro to extradite him. Already, the US Securities and Exchange Commission (SEC) has filed criminal charges against Do Kwon. Now, 25 March is the deadline for the Montenegro government to finalize the matter.

Related news: Kwon Seeks Trial Reschedule in SEC vs Terraform Labs case

For the cancellation of the extradition verdict the Appellate Court panel cited procedural defects on the part of the lower court as well as lack of clear reasons for the decision and “incomprehensible wording.”

Also, the cancellation of the extradition verdict could be short-lived like the one that took place in December 2023. As a fact, the appeal which Kwon won in November was later overturned in December when the Montenegrin High Court, for a second time, decided that the extradition verdict was valid.

From there, Kwon’s legal team filed another appeal which the Appellate Court panel recently accepted. The on-going debacle related to Terra’s Do Kwon’s extradition to US followed the collapse of the stablecoin TerraUSD in May 2022 which triggered a prolonged bear market.

The Terra Luna founder was arrested in Montenegro in March 2023 and was charged with using a fake passport in an attempt to leave the country. Although he was released on a $436,000 bail in May a Montenegro court sentenced him to four years in prison for forgery of travel documents. Although Kwon appealed that sentence he lost the appeal leading to his imprisonment.

The delays in finalizing Kwon’s extradition to the United States could create challenges pertaining to his trial in the case against the U.S. Securities and Exchange Commission (SEC). Already, the United States has indicated that it may conduct Kwon’s trial in his absence if the extradition postponements continue.

In early 2023, the U.S Securities and Exchange Commission (SEC) filed a lawsuit against Kwon, accusing him of orchestrating a multi-billion dollar crypto fraudulent scheme in violation of the country’s securities laws.

The SEC maintains that Terraform Labs and Kwon raised billions of dollars through selling unregistered crypto asset securities, including Luna. It alleges that when Kwon and Terraform were marketing Luna they provided the investors with misleading information which deceived some of them to purchase the token.

Read also: Will the Terra Luna Project Ever Recover?

Despite Montenegro court rejects Do Kwon extradition to the United States both Kwon and the SEC have filed motions for summary judgement in the U.S as each side believes it has an upper hand in the case.

In the meantime, in December 2023 Montenegro extradited Han Chang-joon, Terraform Labs’ former CFO and Do Kwon’s colleague, to South Korea. Like in Do Kwon’s case, after the collapse of Terra Luna South Korea and the U.S laid criminal charges against Chang-Joon.

In South Korea he was charged with violations of the Capital Market Act, the Aggravated Punishment of Specified Economic Crimes Act, and the Electronic Financial Transactions Act which are very serious charges.

The South Korean government accuses him of misrepresenting information pertaining to the viability of Terra’s projects. In fact, Chang-joon was part of the team that promoted the stablecoin TerraUSD.

Read also: LUNA Price Prediction & Forecast for 2025, 2030

Conclusion

The Montenegrin Appellate Court has cancelled Kwon’s extradition order to the United States citing irregularities in the legal process. This means that the lower court will have another retrial of Do Kwon’s case. In the meantime, the United States has given Montenegro up to 24 March to finalize the extradition of Terra founder.

FAQs about Do Kwon

What law did Kwon break?

In Montenegro Kwon broke the country’s immigration laws when he tried to leave the country using faked documents. However, in the United States Kwon violated its securities law when he sold unregistered crypto asset securities.

Where is Do Kwon?

Currently, Do Kwon is in Montenegro where he is serving a prison sentence for using forged travel documents. Montenegro is also processing his extradition paper. Both South Korea and the United States requested the country to extradite Kwon.

Who is the owner of Luna?

Do Kwon is the owner of Luna since he founded Terraform Labs which developed the Terra blockchain protocol, TerraUSD and Luna. TerraUSD which was an algorithmic stablecoin collapsed in 2022.

Why is Do Kwon in trouble?

Do kwon is in trouble for two reasons, the use of forged travel documents and selling of unregistered crypto securities. Montenegro charged Kwon for using fake travel documents while the United States filed a lawsuit against Kwon for selling unregistered crypto securities.

What is the case against Do Kwon?

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Kwon, accusing him and Terraform Labs of selling unregistered crypto asset securities. Kwon will stand trial in the United States for that case. He is currently in prison in Montenegro serving a jail term for using fraudulent travel documents.