A significant development has unfolded in the case of Terraform Labs co-founder Do Kwon, with the Montenegro Appellate Court overturning a prior extradition decision. The initial ruling by the High Court of Podgorica, made in November 2023, had found legal grounds to extradite Kwon to either the United States or South Korea. However, this decision has now been set aside following a successful appeal by Kwon’s defense.
The Appellate Court’s decision on December 14 came after identifying a “significant violation of the provisions” within the Montenegro Criminal Procedure Code in the High Court’s ruling. The higher court pointed out that the High Court’s decision lacked clear reasoning and did not provide adequate explanation for the decisive facts, prompting its annulment. The case will now return to the Podgorica Basic Court for a retrial, marking a new chapter in this ongoing legal saga.
Kwon, a key architect behind the Terra blockchain and its Terra stablecoin and Luna token, has been embroiled in controversy following the collapse of these digital assets in May 2022. The United States Security and Exchange Commission alleges that Terraform Labs and Kwon conducted a fraudulent scheme leading to a loss of at least $40 billion in market value.
The situation escalated when Kwon was arrested in Montenegro in March 2023 for attempting to travel on falsified documents. This arrest led to extradition requests from both the U.S. and South Korea. Additionally, Daniel Shin, another co-founder of Terraform Labs, faces accusations of defrauding investors. Shin has refuted these claims, asserting that his departure from the company in 2020 absolves him of responsibility for its subsequent downfall. His trial before the Seoul Southern District Court in South Korea in October 2023 brought these issues to the forefront.
As the legal proceedings continue to unfold, the crypto community and regulatory bodies worldwide are closely monitoring the outcome, which could have significant implications for the broader digital currency landscape.