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U.S. to Appeal Court Decision for Do Kwon Extradition to South Korea

The co-founder of Terraform Labs was initially rumored to face extradition to the U.S., but this decision was reportedly overturned by the latest Montenegran court proceedings.

This week saw another twist in the tale of Terraform Labs co-founder and former CEO Do Kwon’s extradition process from Montenegro. Following a second hearing, the Montenegran High Court has ruled that he should be extradited to his native South Korea rather than the United States, according to local media, although this decision is still open to appeal. South Korean authorities reportedly requested Interpol’s assistance in bringing Kwon back home.

Kwon was arrested last March trying to flee Montenegro using false documents. Since serving his sentence, he has been stuck in limbo while the small Balkan state decides whether the U.S. or South Korea, which have both applied for extradition, will next get to press charges against the former CEO. Both countries are threatening Do Kwon with strict sentencing for multiple counts of securities fraud, wire fraud, conspiracy, violation of public offering and market manipulation, although some experts believe that he might receive a lighter sentence (or even be acquitted) in South Korea. Kwon's Terra co-founder, Shin Hyun-seung, and former CFO, Han Chang-jun, are currently being tried in the country.

In November, we observed the courts in Montenegro approve the extradition of Kwon without indicating which jurisdiction this would be to. Kwon and his lawyers expressed a preference for him to return to his homeland, but the final decision rested with the Montenegran Minister of Justice. In December, it was reported that Do Kwon would be extradited to the U.S., although the court later accepted Do Kwon's appeal against the extradition decision and annulled it, stating that it was “affected by a significant violation of the provisions of criminal procedure.”

In February this year, the Court of Appeals of Montenegro decided that the extradition case would undergo a retrial, and on March 5, Do Kwon won an appeal against the U.S. extradition.

However, Bloomberg has reported that the U.S. prosecutors will continue to seek the extradition of Kwon regardless of the latest decision:

“The United States continues to seek Kwon’s extradition in accordance with relevant international and bilateral agreements and Montenegrin law. The United States appreciates the cooperation of the Montenegrin authorities in ensuring that all individuals are subject to the rule of law.”

Do Kwon's trial in the U.S. was initially postponed to March 25, as he was originally expected to be extradited to the country by that date. However, the court has stated that the trial cannot be further postponed, even if the defendant is not available.

Although the trial was delayed, pretrial proceedings have continued to move apace. At the end of December, the court granted summary judgment on some of the claims, siding with the SEC in finding that the defendants had offered and sold unregistered securities. The federal judge ruled that Do Kwon and his company had violated U.S. law by failing to register its digital currencies.

We don't have much longer to wait now for the U.S. trial against Terraform Labs and Kwon to begin, which should prove to be an interesting watch, even without the main defendant in the courtroom.