This ruling comes amidst simultaneous extradition requests from South Korea, where Kwon is also wanted for alleged financial misconduct related to the collapse of the TerraUSD (UST) stablecoin.

Podgorica, Montenegro – In a significant legal development, Montenegro’s Constitutional Court has dismissed the appeal filed by Do Kwon, the founder of the cryptocurrency firm Terraform Labs, thereby upholding the decision to extradite him to the United States. The ruling comes amid simultaneous extradition requests from South Korea, where Kwon is also wanted for alleged financial misconduct related to the collapse of the TerraUSD (UST) stablecoin.

Background of the Case

Do Kwon gained international notoriety following the dramatic downfall of TerraUSD in May 2022, which led to substantial financial losses for investors worldwide. The collapse not only decimated the value of UST but also had ripple effects across various cryptocurrency markets, shaking investor confidence and prompting regulatory scrutiny.

In the aftermath, both the United States and South Korea initiated legal proceedings against Kwon. The US authorities accuse him of orchestrating a Ponzi-like scheme, defrauding investors, and manipulating market prices to sustain the peg of UST. Similarly, South Korean prosecutors allege that Kwon engaged in financial fraud and misappropriation of funds raised through the Terra ecosystem.

Montenegro’s Legal Proceedings

Kwon sought refuge in Montenegro, leveraging the country’s reputation for privacy and favorable extradition laws. However, international pressure and mounting evidence have led Montenegro to reconsider its stance. The US and South Korean governments submitted formal extradition requests, detailing the charges and providing substantial documentation to support their cases.

During the legal proceedings, Kwon’s defense team argued that the extradition requests lacked sufficient evidence and that the charges were politically motivated. They also contended that Montenegro’s legal system is biased against foreign nationals and that Kwon’s rights would be compromised if extradited.

Constitutional Court’s Ruling

After a thorough examination of the legal arguments and evidence presented by both sides, Montenegro’s Constitutional Court concluded that the extradition requests are legally sound and in accordance with international treaties to which Montenegro is a party. The court emphasized the importance of upholding the rule of law and cooperating with international efforts to combat financial crimes.

Justice Ana Petrović, speaking on behalf of the court, stated, “The evidence provided by both the United States and South Korea establishes a credible basis for extradition. It is imperative that Montenegro adheres to its legal obligations and supports international justice by facilitating the extradition of individuals accused of significant financial wrongdoing.”

Implications of the Decision

The rejection of Kwon’s extradition appeal marks a decisive moment in the ongoing efforts to hold accountable those responsible for the TerraUSD collapse. For the United States and South Korea, securing Kwon’s extradition is a crucial step in their broader initiatives to regulate the cryptocurrency market and prevent future financial malpractices.

International Response

The ruling has been met with approval from both the US and South Korean governments. In a joint statement, the US Department of Justice expressed satisfaction with Montenegro’s decision, stating that it reinforces the global commitment to addressing financial fraud and protecting investors.

South Korean President Han Soo-kyung also lauded the court’s decision, emphasizing the importance of international cooperation in tackling complex financial crimes that transcend national borders.

Kwon’s Next Steps

Following the court’s decision, Montenegro is expected to proceed with the extradition process. Kwon remains detained pending the finalization of the extradition treaty procedures. His legal team has indicated plans to explore any remaining legal avenues to contest the extradition, although the likelihood of success appears slim given the court’s strong stance.