Montenegro’s Constitutional Court has rejected an appeal by Kwon Do-hyeong, widely known as Do Kwon, co-founder of Terraform Labs and a central figure in the collapse of the TerraUSD (UST) stablecoin and its linked token, Luna.
The court’s decision, reported on December 24 by local outlet Vijesti, upheld the authority of the country’s Minister of Justice to oversee extradition matters, dealing a blow to Kwon’s efforts to challenge the proceedings.
Kwon’s appeal targeted a Supreme Court ruling that invalidated his transfer to South Korea, delegating the decision on extradition to Justice Minister Bojan Božović.
Kwon’s Legal Team Said the Ruling Violated Procedural Fairness
His legal team argued the ruling violated procedural fairness and his rights to a fair trial and family life.
However, the Constitutional Court found no merit in these claims, clearing the path for the Justice Minister to determine Kwon’s fate.
Local reports indicate that Montenegro’s authorities may lean toward extraditing him to the United States rather than South Korea, with analysts suggesting national interests could play a decisive role.
Kwon, accused of causing financial losses exceeding $34 billion in the Terra-Luna crash, has been under scrutiny since fleeing South Korea in 2022.
After traveling through Singapore, the UAE, and Serbia, he was arrested in Montenegro for using a forged passport.
Montenegrin court rejects Do Kwon's constitutional appeal, faces extradition to the US
The constitutional complaint filed by Terraform Labs founder Do Kwon in Montenegro has been rejected. Do Kwon's side claimed that the extradition procedure was unfair and that there were err…— Bpay News (@bpaynews) December 25, 2024
Despite the ruling, Kwon’s legal team is expected to continue efforts to block his extradition to the U.S., where he faces multiple charges.
Meanwhile, South Korean authorities have urged Montenegro to expedite the process, expressing concerns about potential human rights violations if the proceedings are prolonged.
The timeline for Kwon’s extradition remains uncertain, but the court’s decision has significantly narrowed his legal options.
Judge Signs Off on $4.5B Terraform, Do Kwon Settlement with SEC
In June, U.S. District Court Judge Jed Rakoff of the Southern District of New York (SDNY) approved a settlement that will require Terraform Labs and Kwon to pay a staggering $4.5 billion in disgorgement and civil penalties.
Additionally, they will be permanently banned from engaging in any transactions involving “crypto asset securities,” which includes tokens within the Terra ecosystem.
The settlement came after initial proposals from the SEC suggested a $5.3 billion penalty, which Terraform Labs contested by advocating for a maximum fine of $1 million.
Ultimately, on June 6, the legal representatives for both Kwon and Terraform Labs agreed to the SEC’s revised settlement offer of $4.5 billion.
It is important to note that Kwon, who is currently in custody in Montenegro awaiting a decision on his extradition, did not attend the trial where the settlement was reached.
Terraform Labs, currently operating under Chapter 11 bankruptcy protection, faces the challenge of how to fulfill the substantial financial obligations imposed by the settlement.
According to the trial testimony of the company’s current CEO, Chris Amani, Terraform Labs has approximately $150 million in assets.
However, it remains uncertain how the company will manage to pay the substantial fines imposed by the settlement.
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