Montenegro Court Rejects Extradition Approval for Terra Founder Do Kwon
December 19, 2023
The decision, announced on December 14, overturns the previous ruling by the Podgorica High Court, citing a procedural error in the extradition process.
The Montenegro Court of Appeal has overturned the decision made by the Podgorica High Court to approve the extradition of Do Kwon, former CEO of Terraform Labs, to the United States or South Korea. In a statement released on December 14, the appellate court ruled the extradition approval was invalid due to a procedural error.
The court ruled that the investigating judge failed to follow legal requirements by failing to hear Kwon’s defense of the U.S. extradition request during the hearing. Consequently, the court has ordered a retrial of the case, directing it back to the Podgorica Basic Court.
Legal Background
The High Court of Podgorica approved Kwon’s extradition to Montenegro in November 2023, following the fulfillment of necessary legal conditions. According to reports, Montenegro’s Justice Minister was inclined to extradite Do Kwon to the United States.
However, the latest ruling indicates that Kwon’s defense effectively challenged the initial decision, leading to the nullification and retrial order. If the extradition is eventually sanctioned, the final verdict rests with the Minister for Justice in Montenegro.
Extradition Request and Allegations
The extradition requests from the United States and South Korea stem from criminal charges related to the collapse of Terraform Labs, Kwon’s multibillion-dollar cryptocurrency company, in May 2022.
According to the Securities and Exchange Commission (SEC), Kwon and Terraform Labs orchestrated a fraudulent scheme that lost at least $40 billion in market value.
However, Kwon’s legal issues in Montenegro extend beyond the extradition proceedings. The former Terra CEO has been arrested and sentenced to prison in the country on charges of possessing falsified official documents.
테라·루나로 50조 이상 날렸는데…권도형 송환 왜 이렇게 늦어지나
2023-12-20 22:37:12
가상화폐 ‘테라·루나’ 폭락 사태의 핵심 인물인 권도형(32) 테라폼랩스 대표의 송환 시기가 불투명해졌다.
19일(현지시간) 블룸버그통신에 따르면 몬테네그로 포드고리차 항소법원은 권씨가 범죄인 인도 결정에 항소한 사건을 포드고리차 고등법원으로 돌려보냈다.
이 사건은 포드고리차 고등법원이 지난달 권씨의 범죄인 인도를 승인한 데 대해 권씨 측이 불복한 것이다. 항소법원의 결정은 몬테네그로 사법부가 권씨의 신병 이송 결정을 둘러싼 적법성을 다시 따져보겠다는 취지로 해석된다.
포드고리차 항소법원은 권씨의 신병을 인도하라는 기존 결정에 근거가 불분명하고 절차적 문제가 있다고 봤다고 블룸버그 통신은 전했다.
권씨는 가상화폐 ‘테라·루나’를 발행한 테라폼랩스 공동 창업자다. 지난해 테라·루나 폭락 사태로 인한 전 세계 투자자의 피해 규모는 50조원 이상인 것으로 추산된다.
권씨는 사태가 터지기 직전인 지난해 4월 싱가포르로 출국한 뒤 잠적했다. 이후 두바이와 세르비아에 숨어 지내다가 몬테네그로에서 해외 도피 11개월 만에 검거됐다.
그는 몬테네그로 법원 1·2심에서 가짜 코스타리카 여권을 소지한 혐의 등으로 징역 4개월을 선고받았다.
막대한 투자 피해를 유발한 책임을 따지는 형사사건은 권씨가 이송될 국가에서 다뤄지게 된다.
권씨는 몬테네그로에 구금돼 있다. 지난 6월 범죄인 인도 절차를 이유로 6개월 구금 명령을 받은 권씨는 구금 기간 연장에 따라 내년 2월15일까지 구치소에 남게 된 상태다.
이런 상황에서 범죄인 인도 재판이 재개돼 권씨의 신병이 언제 이송될지는 더욱 불투명해졌다. 항소 사건의 재판 결과 원심대로 신병 이송 결정이 유지된다고 해도, 송환국이 어디가 될지는 별개의 결정이 뒤따라야 한다.
Do Kwon Extradition Overturned: What’s Next for Disgraced Terra Founder?
Last Updated 2 days ago
KEY TAKEAWAYS
Do Kwon is widely blamed for triggering the “crypto winter” in 2022.
The disgraced founder of Terraform Labs was arrested in Montenegro in March 2023.
Following legal battles, his extradition to the United States has been temporarily delayed.
The saga surrounding fallen crypto billionaire Do Kwon took another twist this week as a Montenegro court ordered a review of the Terra founder’s extradition to the United States. A temporary reprieve for the disgraced crypto mogul.
Kwon, who was arrested in Montenegro on March 23, 2023 for traveling on a fake passport, faces fraud charges in his native South Korea and the US related to the collapse in May of TerraUSD (USTC) and its sister token LUNA, which vaporized $60 billion in investor funds overnight.
A Brief Pause to Kwon’s Extradition
The 31-year-old Stanford graduate was set to be handed over to US authorities last month after a Podgorica court had previously considered his extradition at the request of Korean prosecutors. But this week, upon appeal from Kwon’s defense team, Montenegro’s Appellate Court revoked that decision , saying the original ruling contained “unclear reasons” and violated criminal procedure rules.
As a result, Kwon will remain in detention in Montenegro pending a retrial by the lower court. The Appellate Court also rescinded an earlier decision to postpone the extradition until Kwon served a four-month sentence for traveling on forged documentation. Judges determined such matters fall strictly under the Justice Minister’s jurisdiction.
It’s the latest twist in a saga that has fixated the crypto world for months. Kwon founded Terraform Labs in 2018 and oversaw the creation of the Terra blockchain and its algorithmic stablecoins. Using a complex system of minting and burning tokens, the protocol was designed to maintain the UST token’s 1:1 peg to the US dollar. Dubbed “South Korea’s Warren Buffet” and “Genius Coder”, Kwon attracted billions in investments from major venture funds.
Kwon looked to have pioneered a novel method for managing stablecoins. Unlike the traditional approach where each stablecoin is backed by an equal amount of dollars, his method did not rely on having a dollar for every stablecoin issued. That illusion was quickly squashed.
Following the catastrophic collapse of Terra in May 2022, Kwon initially went silent on Twitter even as he faced accusations of fraud. In September of that year, Korean officials announced Kwon was on the run. He had allegedly been spotted in Serbia, Dubai, and Montenegro.
Then came news of his dramatic arrest in Montenegro as he was about to board a private jet to Turkey on a fake Guatemalan passport. Facing charges in Korea, Kwon agreed to expedited extradition.
American Prosecutors Look to See Kwon in Court
However, in March, American prosecutors also stepped in with fraud allegations , arguing some of Kwon’s schemes targeted US investors. Kwon now faces up to 20 years behind bars if convicted Stateside. He has pleaded not guilty, maintaining the charges are “politically motivated.”
As crypto watchers continue monitoring the case, many wonder whether Kwon will end up serving time. If so, where? Legal experts say it’s likely he will be extradited first to South Korea before potentially facing American justice.
Kwon is one of several high profile crypto entrepreneurs who have come into serious legal trouble over the past couple of years. Alongside the Terraform Labs founder, he is also joined by Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, and the founder and now-former CEO of Binance, Changpeng “CZ” Zhao. All three men have been accused of distinct crimes.
Bankman-Fried was found guilty last month while, a few weeks later, Zhao pleaded guilty a few weeks later.
Many in the industry point to Kwon and others for the wider damage to the industry’s reputation. This perception has proven hard to shake, despite significant price rallies across much of the crypto market in 2023.
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