US Prosecutors to Challenge Montenegrin Court’s Ruling on Extraditing Do Kown to South Korea

US prosecutors are planning to appeal the Montenegrin High Court’s decision to extradite former cryptocurrency mogul Do Kwon to South Korea for his alleged involvement in the $40 billion collapse of the TerraUSD stablecoin in 2022. The US Justice Department has expressed its intention to pursue Kwon’s extradition in compliance with international agreements and Montenegrin law.

Do Kwon, the co-founder of Terraform Labs Pte, was detained in Montenegro in March 2023 for using a fake passport. His arrest led to extradition requests from prosecutors in Seoul and New York. While some view the court’s ruling as a win for Kwon, concerns have been raised by legal experts in the crypto industry. Terrence Yang, a managing director at Swan Bitcoin, criticized the decision and questioned the wisdom of sending Kwon to South Korea, suggesting that the US has a significant number of victims affected by the alleged fraud.

The Securities and Exchange Commission (SEC) has been pursuing a civil case against Terraform Labs and Kwon, alleging involvement in a $40 billion cryptocurrency fraud. Kwon’s trial was postponed to mid-March due to his extradition request. His legal team has appealed the Montenegro High Court’s decision to uphold extradition requests from the US and South Korea.

Additionally, Terraform Labs filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware, citing estimated assets and liabilities between $100 million and $500 million. The company stated that the bankruptcy protection filing would facilitate an appeal against the SEC’s securities fraud lawsuit. Terraform Labs CEO Chris Amani highlighted the importance of bankruptcy protection for the company’s operations, the preservation of value for stakeholders, and the pursuit of an appeal against the SEC Enforcement Action.