The new extradition revocation for Do Kwon

Acceptance for the appeal of the Montenegrin court: the extradition, to South Korea or the United States, of Do Kwon, co-founder of Terraform Labs, has been once again revoked.

Let’s see below all the details. 

The Montenegrin court cancels Do Kwon’s extradition

As anticipated, the Court of Appeal of Montenegro has revoked the previous approval of extradition of Do Kwon to South Korea or the United States, accepting the appeal filed by his defense lawyers. 

This overturns the decision of the country’s High Court in December.

The co-founder of Terraform Labs had previously won an appeal on December 19, overturning the original decision of the High Court. Which had declared legally valid the extradition requests in November.

However, the High Court has once again confirmed the validity of the requests on December 29, prompting Do Kwon to file a new appeal in January.

The Court of Appeal justified the revocation by citing procedural issues in the trial, emphasizing the lack of clarity and reasoning in the decision of the Supreme Court.

In particular, it highlighted issues in the way extradition requests have been handled. Furthermore, the lack of a clear determination on the order of arrival of requests from South Korea and the United States.

The case will now be returned to the first instance court for a review.

The developments of the judicial case 

The extradition request for Do Kwon arises in relation to alleged illicit financial activities in the United States and South Korea. Specifically, connected to the multi-billion dollar collapse of the Terra ecosystem that occurred in May 2022.

The arrest of Do Kwon initially took place in Montenegro last March, on charges of using a fake passport in an attempt to leave the country.

Released on bail of $436,000 in May, the conviction comes later with four months of imprisonment in June for document forgery, a sentence confirmed in November after an appeal.

His fame grew globally in September 2022.

That is when Interpol issued a red notice against him, linked to the collapse of the TerraUSD and Luna tokens, which he created, resulting in the loss of about 40 billion dollars of investments in a few days.

On Monday, former CFO of Terraform Labs, Han Chang-joon, former colleague of Do Kwon, was extradited from Montenegro to South Korea, adding further developments to this complex legal case. 

Lee’s testimony against the founders of Terraform Labs

Recently, a former developer from Terraform Labs, identified as “Lee”, took the witness stand at the fourteenth criminal division of the Southern District Court in Seoul.

The witness, former leader of the Terra development team, has presented crucial statements against Terra’s founder, Do Kwon, and Terraform Labs’ co-founder, Shin Hyun-seung.

According to local media, Lee stated in a discussion with Kwon that the latter had acknowledged the violation of South Korean financial regulations in the use of TerraUSD as a payment method. 

This raises questions about Terra executives’ awareness of the regulatory constraints of stablecoin.

Lee’s testimony also revealed Terra’s operational strategy. Aimed at giving LUNA the role of currency through the “ChaiPay” payment system, with profits linked to the expected appreciation of the LUNA token value.

After the collapse of the Terra-Luna cryptographic project in 2022, South Korean prosecutors accused Kwon, Shin, and Terraform Labs of defrauding investors through the misleading promotion of the Terra stablecoin. 

Shin has contested, arguing the regulatory ambiguity on crypto payments and claiming to have left Terra two years before the collapse. 

Shin’s defense team has questioned the accuracy of Lee’s statements. Highlighting in particular the discrepancies between the claims and the presented facts, indicating a more complex narrative.