Bloomberg reports that Montenegro’s government has decided to extradite Terraform Labs Pte. co-founder Do Kwon to the United States for legal proceedings, marking a pivotal development in his legal saga. This decision comes after a complex legal tug-of-war between the U.S. and South Korea, both of which have been seeking Kwon’s extradition due to his involvement in the catastrophic collapse of the TerraUSD stablecoin in 2022, which led to losses estimated at around $45 billion.
Montenegro’s Justice Ministry, in a statement, indicated that the majority of legal criteria favored the U.S. extradition request. The decision was announced by Justice Minister Bojan Bozovic, but no specific timeline for the extradition was provided. This move potentially ends the dispute over where Kwon should face justice, although previous court decisions in Montenegro had favored extradition to South Korea, leaving some uncertainty about whether this is indeed the final decision.
Kwon’s legal troubles stem from his role in Terraform Labs, where he and the company were charged with fraud by both U.S. and South Korean authorities. In the U.S., Kwon faces charges from the Manhattan U.S. attorney’s office, while in South Korea, he is also under scrutiny for similar allegations. The Securities and Exchange Commission (SEC) in the U.S. has already found both Terraform Labs and Kwon liable for fraud in a civil trial, leading to a settlement agreement where Terraform Labs committed to a $4.5 billion payment.
The decision by Montenegro underscores the international dimensions of cryptocurrency regulation and enforcement, highlighting the complexities involved in prosecuting digital asset-related crimes across borders. It also reflects the growing interest and involvement of national legal systems in addressing the fallout from significant crypto market failures, which can have global repercussions.
Kwon was arrested in Montenegro for traveling with a foreign passport, adding to the narrative of his attempt to evade legal consequences. His lawyer, Goran Rodic, has been advocating for extradition to South Korea, aligning with Kwon’s preference, but the latest decision shifts the scenario towards the U.S. jurisdiction.
As of now, the U.S. legal authorities have not publicly commented on the extradition news, and Kwon’s legal team has also refrained from immediate remarks. This case not only illustrates the personal legal risks for those in the crypto industry but also the international legal frameworks that are still adapting to handle such novel financial technologies and their associated risks. The outcome of this case could set precedents for how similar situations are handled in the future, affecting both the crypto industry and international legal cooperation.
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