Montenegro withdraws Do Kwon extradition again after successful appeal

Terraform Labs and its former CEO Do Kwon's legal work in the United States and Montenegro continues with new developments.

According to an announcement published on the website of the Montenegrin Court of Appeal on March 5, the decision to extradite Terraform Labs co-founder Do Kwon to the United States was revoked by the court.

The development comes amid bankrupt Terraform Labs' recent legal battle with the U.S. Securities and Exchange Commission (SEC).

Why was Kwon’s extradition revoked?

The Podgorica High Court held that Kwon’s extradition to the United States for criminal prosecution violated the country’s criminal procedure regulations.

Another key argument in Kwon’s successful appeal was the issue of priority for extradition. Although Kwon preferred to return to South Korea, the Podgorica High Court supported his extradition to the United States. The decision was based on the priority of the U.S. extradition request, which arrived a day earlier than South Korea's.

However, the Court of Appeal challenged this ruling. The court noted that the U.S. request for temporary detention was made on March 27, 2023, which was later than South Korea’s extradition request. South Korea notified their request via email on March 24 and March 26, 2023, ahead of the U.S. formal request on March 28. The court considered that this chronological order might have an impact on the hearing of the case and therefore required careful consideration.

It is reported that the second-instance court ruled to send the case back to the first-instance court for retrial.

Kwon's extradition has been delayed for months, with the United States and South Korea both hoping to try him in their respective jurisdictions. Authorities in both countries want Kwon to take responsibility for the collapse of Terra algorithmic stablecoin UST, which cost the crypto industry more than $40 billion.

Terraform Labs slams SEC for overreach

The U.S. Securities and Exchange Commission (SEC) recently objected to Terraform Labs' $166 million payment to Dentons, arguing that the company should not have to cooperate with the law firm in bankruptcy proceedings or pay legal fees for its employees.

In a March 4 filing, Terraform Labs responded to the SEC’s objection to a $166 million bail payment to Dentons Law Firm.

The bankrupt cryptocurrency company criticized the SEC’s objection, calling it an example of government overreach. It also claimed the regulator's move was aimed at disrupting pre-trial proceedings. .

According to the company:

“The SEC’s objections, based on concerns about creditors, are actually pretexts for its real motives: to disadvantage and distract opponents on the eve of trial.”

The company urged the court to reject the SEC's objection, saying it contained legal misinterpretations and factual inaccuracies.

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