PODGORICA, Montenegro — An appeals court in Montenegro has overturned a recent ruling that a cryptocurrency mogul, Terraform Labs founder Do Kwon, should be extradited to the United States to face fraud charges rather than to his native South Korea, the court said Tuesday.
Kwon, 32, was arrested nearly a year ago in Montenegro on an international arrest warrant in connection with a $40 billion crash of Terraform Labs’ cryptocurrency, which devastated retail investors around the world. Both South Korea and the U.S. have requested Kwon’s extradition from Montenegro.
Last month, the High Court in Montenegro decided to hand over Kwon to the U.S. But the Court of Appeals annulled the decision and ordered the lower court to repeat the process. The Appeals Court in a statement cited procedural issues over who was the first to file a request, the U.S. or South Korea.
It wasn’t immediately clear when the final decision could be made.
Kwon, known as “the cryptocurrency king,” is wanted by the U.S., where he was charged with fraud by federal prosecutors in New York. South Korean prosecutors have also sought his extradition.
Kwon and another South Korean were arrested at Montenegro’s Podgorica Airport on March 23, while trying to depart for Dubai, United Arab Emirates, using fake Costa Rican passports. Kwon and five others connected to Terraform were wanted because of allegations of fraud and financial crimes in relation to the implosion of its digital currencies in May 2022.
TerraUSD was designed as a “stablecoin,” a currency which is pegged to stable assets like the dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg.
Kwon is serving a four-month prison sentence in Montenegro for using the fake passport.