The Montenegro Court of Appeal has upheld the extradition of Do Kwon, co-founder of Terraform Labs and the Terra blockchain, to South Korea.
In a statement issued on August 1, the Montenegrin court confirmed the extradition of the Terra co-founder to his home country of South Korea, rejecting the extradition request filed by the US government.
Kwon was arrested by Montenegrin authorities in March last year following the bankruptcy of Terraform Labs. He is currently facing charges of securities fraud involving crypto assets and is widely held to be the main person responsible for the collapse of the Terra ecosystem, which was one of the largest and most promising cryptocurrency projects on the market, attracting the interest of millions of people at the time. However, this ecosystem collapsed after the double implosion of its native assets, the algorithmic stablecoin UST and the cryptocurrency LUNA, resulting in losses of close to $40.000 billion.
The Montenegrin court's decision on the Do Kwon case
The recent ruling by Montenegro's Court of Appeal confirms the decision of the Higher Court in Podgorica, which had already authorized Kwon's extradition to his home country.
In release, the Montenegrin court argued that South Korea's extradition request took priority over the US one, based on the country's International Legal Assistance in Criminal Matters Act. This law states that in cases where two countries request the extradition of the same person, preference should be given to the country that submitted its request first.
The court noted that there were no appeals against the decision, making the ruling final. Under the ruling, Kwon will be sent to South Korea to face charges related to the criminal offenses he is accused of.
Implications for the cryptocurrency ecosystem
Do Kwon's extradition to South Korea, where he will face multiple charges of fraud and securities law violations, has profound implications for the cryptocurrency ecosystem.
As mentioned, Kwon was a prominent figure in the crypto market, known for his role in the creation of Terra, UST, and LUNA and subsequently for his multi-billion dollar collapse, which not only affected individual investors, but also ended up causing a deep crisis of confidence in the market in general.
For some experts, the decision to extradite Kwon to South Korea could be seen as an attempt by South Korean authorities to regain confidence in their regulatory system and demonstrate that they are willing to crack down on fraud in the cryptocurrency space. The media and public attention on this case could lead to increased pressure for stricter regulations in the sector, both in South Korea and internationally.
Furthermore, the extradition could set a precedent for how cryptocurrency fraud cases are handled in the future. As the use of cryptocurrencies and blockchain technologies continues to grow, governments around the world are struggling to find a balance between fostering innovation and protecting investors.
The US response to the Montenegro court ruling
Despite the final decision by the Montenegrin court, the United States said it is still seeking Do Kwon's extradition.
The U.S. Department of Justice issued a statement expressing its appreciation for the cooperation of Montenegrin authorities in this case and also reiterating its commitment to ensuring that all individuals are subject to the rule of law. This highlights the complexity of the case, as Kwon faces charges in both South Korea and the United States, where he is also accused of violating securities laws and committing civil fraud.
