The legal battle in Montenegro over Do Kwon, the co-founder of Terraform Labs, is not over as yet. An appeal was filed by lawyers on his behalf against a decision taken by the High Court of Podgorica.
According to the decision, conditions for Kwon’s extradition over charges related to Terra’s collapse, either to South Korea, or the US, had been met earlier this month.
The appeal
Kwon’s attorneys said in the appeal that the laws regarding legal assistance from other countries had been interpreted in a ‘bizarre manner’ in Montenegro.
They further said that the Supreme Court and High Court in the country had applied the interpretation to Kwon’s case to satisfy the wishes of the Minister of Justice.
Andrej Milovic, the Minister of Justice in Montenegro, had reportedly been left to decide the extradition of the Terra co-founder this month after the reversal of a previous decision court decision.
Criminal charges have been filed against Kwon in both South Korea and the United States. The two countries want to prosecute him for violations of capital market rules and fraud in their respective jurisdictions.
New wrinkle
These allegations are the newest wrinkle in the back-and-forth between the legal system in Montenegro and Kwon’s attorneys that has been happening for months.
Once these issues are settled, it is likely that Kwon will either be extradited to the US, or his home country, where he will face criminal charges that stem from the collapse of Terra back in 2022.
The downfall of the Terra ecosystem had shaken the crypto markets and resulted in losses of billions of dollars.
Last month, a ruling that granted the extradition request of Kwon to South Korea was annulled after significant violations had been discovered in the criminal procedure by an appellate court.
The events
Due to that decision, Kwon’s case had been sent back for retrial, where his extradition had been approved once more.
Before that, the Terra co-founder had been able to appeal a decision successfully, which had granted his extradition to the United States for the second time.
The ruling discovered that Kwon’s extradition had first been requested by the authorities in South Korea and not those in the US.
This month, both Terraform Labs and Kwon were found liable for fraud in the United States in a case filed by the Securities and Exchange Commission (SEC).
A Manhattan jury ruled that Terraform Labs and Kwon had made misrepresentations about the stability and success of Terra.
The collapse of the TerraUSD algorithmic stablecoin saw the entire Terra ecosystem unravel in the spring of 2022, which resulted in losses of more than $40 billion.
As compared to most stablecoins, TerraUSD did not maintain its peg to the US dollar through asset reserves. Instead, it relied on trading incentives to do so.
According to US regulators, TerraUSD had previously been depegged in 2021, but Kwon and Terraform Labs had hidden this fact with the help of Jump Trading, an institutional investor.
A jury also found that they had also misrepresented the integration of Terra with Chai, a South Korean payments app.