The Appeals Court of Montenegro has overturned a prior order to extradite Do Kwon to South Korea.
The Appeals Court of Montenegro has reversed one of the orders issued to extradite Do Kwon to South Korea. Kwon, the entrepreneur who founded Terraform Labs and spearheaded the bitcoin industry, is currently facing allegations related to his company’s failure, which led to significant financial losses.
Terraform Labs Founder Do Kwon Extradition Blocked
Both South Korea and the United States have been requesting Kwon’s extradition for several months due to his alleged involvement in the Terraform Labs incident. The corporation’s failure resulted in investors losing around $40 billion, causing a tremor in the global cryptocurrency markets.
The Appeals Court granted the appeals filed by Kwon and his defense attorneys, overturning the earlier ruling by the High Court in Podgorica. The ruling returned to the court that heard the first case, allowing for a fresh trial and final decision.
After departing South Korea and Singapore before the collapse of the corporation in 2022, Kwon had been on the run for a number of extended periods of time. Montenegro took him and a co-conspirator into custody in March of the previous year.
Montenegro sent Kwon’s business partner, known only by his initials, J.C.H., to South Korea at the beginning of February. Terraform Labs advertised the TerraUSD cryptocurrency as a stablecoin, aiming to prevent significant movements by tying it to stable assets like the US dollar.
Kwon was able to successfully market TerraUSD and its sister token, Luna, as the next big thing in cryptocurrency, resulting in billions of dollars in investments and global fanfare.
Nevertheless, in May of 2022, both tokens experienced a downward spiral that ultimately resulted in severe financial losses for traders and investors. Specialists assert that Kwon orchestrated a glitzy Ponzi scam, resulting in the loss of a significant number of investors’ life savings.
The collapse of Terraform Labs remains one of the most significant financial disasters in the world of cryptocurrencies. Following the conclusion of a civil action, the United States Securities and Exchange Commission (SEC) attempted to impose hefty penalties on both Terraform Labs and Do Kwon.
Terraform Labs Faces SEC’s Multi-Billion Penalty
The Securities and Exchange Commission (SEC) submitted a document on April 19 to the United States District Court for the District of New York, demanding a total of $520 million in civil penalties, along with a disgorgement and prejudgment interest amounting to $4.7 billion.
In response to Kwon’s opposition to Terraform’s proposal for a maximum civil penalty of $3.5 million, the latter advocated for a somewhat lower threshold of $800,000.
The Securities and Exchange Commission (SEC) also recommended disqualifying Do Kwon from serving as an officer or director of a security issuer and ensuring full disclosure of banking accounts and assets.
In addition, the Securities and Exchange Commission (SEC) intends to issue a conduct-based injunction against Terraform in order to prevent any future instances of misbehavior of this nature.