Do Kwon extradition approval canceled by Montenegro court

The Appellate Court in Montenegro has canceled the approval of Do Kwon’s extradition, accepting the appeal of the Terraform Labs co-founder’s defense attorneys and annulling the Nov. 17 decision of the High Court.

The Appeals Court cited issues in the legal process, particularly the lack of clear reasons and facts in the High Court’s decision, according to a statement.

While the South Korean request seems to have been processed correctly, with Do Kwon agreeing to an expedited extradition process, the court said there were procedural issues in how the investigating judge dealt with the U.S. extradition request.

Specifically, it stated the judge failed to inform Do Kwon properly of the reasons and evidence for the U.S. request and to invite him to present his defense, as required by law. The case has now been returned to the initial court for a retrial.

The High Court in Podgorica, the capital city of Montenegro, previously agreed for Do Kwon to be extradited to one of the countries after serving a 4-month prison sentence in Montenegro for document forgery. The Minister of Justice of Montenegro was set to make a final decision on which country took precedence.

Terra ecosystem collapse

Do Kwon’s extradition had been sought for charges related to financial crimes in the U.S. and South Korea, stemming from the multi-billion dollar collapse of the Terra ecosystem in May 2022. 

Last week, Bloomberg reported Do Kwon’s detention in Montenegro was extended at the request of the U.S. and South Korea until Feb. 15 amid his extradition appeal. The detention period had been scheduled to end on Friday, Dec. 15.

Previously, The Wall Street Journal reported, that the Terraform Labs co-founder would be extradited to the U.S., citing anonymous sources who said Montenegro’s Justice Minister told people of his plans in “closed-door discussions.”

Kwon was initially arrested in Montenegro in March when charged with using a fake passport to attempt to leave the country. However, he was freed from jail pending trial after a court agreed to a $436,000 bail in May. Subsequently, in June, a Montenegro court sentenced him to four months in prison after finding him guilty of document forgery. Kwon appealed that court decision, lost the appeal, and was finally sentenced to four months in November.

Kwon was the focus of a worldwide search in September 2022 when global police body Interpol reportedly issued a so-called red notice for him, stemming from the May 2022 collapse of the two tokens he had created — TerraUSD and Luna — which wiped out some $40 billion of investor wealth in a few days.