Do Kwon, the co-founder of the bankrupt Terraform Labs, will be extradited to South Korea, a Montenegro appeals court ordered yesterday (Thursday), rejecting the United States’ bid. However, it remains unclear when he will be sent to his home country.
The Fate of Do Kwon
The latest order came after months of legal tussle between South Korea and the US regarding the extradition of Kwon. With its latest ruling, the appeals court upheld the previous ruling of a lower court.
Although the charges of South Korea against Kwon remain unknown, the US prosecutors brought fraud charges against him.
Kwon and one of his associates were arrested last year while travelling from Montenegro to Dubai using fake travel documents. Although the country's lower court previously ordered his extradition, the ruling was suspended by the Supreme Court after the top prosecutor in the Balkan country challenged the previous lower court order, citing procedural errors. He was then released on bail.
???? Plot twist in the #Luna #TerraLuna saga! The Montenegro court has ruled that #DoKwon will be extradited to South Korea, not the U.S. This decision follows the court's assessment that South Korea's extradition request was received before the U.S.'s, solidifying Kwon's return… pic.twitter.com/bsVSzL3XEQ
— Paweł Łaskarzewski (@PawelSynapse) August 1, 2024
The Collapse of the Crypto Empire
Kwon was known for building Terraform Labs. However, the project's two cryptocurrencies, TerraUSD and Luna, crumbled in 2022, wiping out about $37 billion in value. The collapse of the algorithmic stablecoin triggered the shuttering and downfall of several other cryptocurrency companies.
In June, Terraform Labs and Kwon agreed to settle with the US Securities and Exchange Commission (SEC), paying about $4.5 billion in recovery and civil penalties. Out of the total amount, Kwon personally agreed to pay at least $204.3 million.
Initially, the US regulator was seeking $5.3 billion in settlement. However, legal representatives of the defendants countered that with only $1 million in civil penalties and no recovery or injunction.
Furthermore, Kwon and Terraform Labs would be permanently banned from buying and selling crypto asset securities, including tokens in the Terra ecosystem.
Terraform Labs declared bankruptcy earlier this year in Delaware, United States. In the court filing, the now-defunct crypto company showed liabilities between $100 million and $500 million. However, its estimated assets were in the same range.
This article was written by Arnab Shome at www.financemagnates.com.
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