Montenegro appeals court overturns a decision to extradite Terraform Labs founder to the US

PODGORICA, Montenegro — An appeals court in Montenegro has overturned a recent ruling that cryptocurrency magnate Terraform Labs founder Do Kwon should be extradited to the United States to face fraud charges instead of his native South Korea, the court said Tuesday.

Kwon, 32, was arrested in Montenegro nearly a year ago on an international arrest warrant in connection with a $40 billion crash of Terraform Labs’ cryptocurrency that devastated retail investors around the world. Both South Korea and the US have requested Kwon’s extradition from Montenegro.

Last month, the Supreme Court in Montenegro decided to hand Kwon over to the US. But the Court of Appeal overturned the decision and ordered the lower court to rehear the trial. The Court of Appeals in a statement cited procedural issues over who filed first: the U.S. or South Korea.

It was not immediately clear when the final decision could be made.

Known as “the cryptocurrency king,” Kwon is wanted by the US, where he was charged with fraud by federal prosecutors in New York. South Korean prosecutors have also requested his extradition.

Kwon and another South Korean were arrested at Montenegro Airport in Podgorica on March 23 while trying to leave for Dubai, United Arab Emirates, using fake Costa Rican passports. Kwon and five others affiliated with Terraform were wanted on fraud and financial crimes charges related to the digital currency’s implosion in May 2022.

TerraUSD is designed as a “stablecoin,” a currency pegged to stable assets like the dollar to avoid drastic price fluctuations. However, approximately $40 billion in market value was wiped out for holders of TerraUSD and its floating sister currency, Luna, after the stablecoin fell well below its $1 mark.

Kwon is serving a four-month prison sentence in Montenegro for using the fake passport.