Do Kwon Extraditable to South Korea, Legal Saga Nears New Chapter

Do Kwon, the embattled founder of Terraform Labs, finds himself a step closer to facing the music in his home country of South Korea. A Montenegrin judge has ruled that Kwon can be extradited to South Korea after completing his jail sentence for using a forged passport. This latest development marks a pivotal moment in the complex legal battle surrounding Kwon, who has become a central figure in the dramatic collapse of Terra’s crypto ecosystem in 2022.

The Terra ecosystem’s implosion triggered a domino effect across the crypto landscape, plunging the market into a bear market and leading to the bankruptcy of numerous projects with exposure to TerraUSD (UST), the ecosystem’s algorithmic stablecoin. Both South Korea and the U.S. have been locked in a “jurisdictional tug-of-war” ever since Kwon’s arrest in Montenegro last year, each requesting his extradition to face charges related to the Terra debacle.

According to a report by Montenegrin publication Pobjeda, the High Court announced the decision following the Court of Appeals rejection of the U.S. extradition request. The order of extradition requests played a crucial role in the Appeals Court’s decision. The U.S. Embassy initially requested Kwon’s temporary detention, while South Korea’s Ministry of Justice submitted a formal extradition request later. 

This latest ruling marks the second time the Montenegrin court system has reversed a decision regarding Do Kwon’s extradition. In February, citing “significant violations” and “incomprehensible” wording in the initial order, the appellate court overturned the lower court’s ruling to extradite Kwon to the U.S.

While awaiting extradition, Kwon’s legal troubles in the U.S. show no signs of abating. The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against him, scheduled to begin later this month. Kwon’s physical presence at this trial remains uncertain.

With his extradition to South Korea now seemingly on track, Do Kwon faces a new chapter in his legal saga. He will likely be tried for violating capital market regulations, charges that could carry a significant sentence – a South Korean financial crime investigator estimates a potential imprisonment exceeding four decades.

The outcome of Kwon’s case in South Korea will be closely watched by the global crypto community. It could set a precedent for how regulatory bodies handle similar situations in the future, with potential implications for other crypto projects and their founders. As the dust settles on the Montenegrin legal wrangling, the focus now shifts to South Korea, where Kwon’s fate hangs in the balance.