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Court Upholds Extradition Ruling
Montenegro’s Constitutional Court has rejected an appeal from Do Kwon, co-founder of Terraform Labs, regarding his extradition. The court unanimously found legal inconsistencies in Kwon’s appeal, backing an earlier decision favoring extradition.
Accusations and Global Investigations
Do Kwon has faced intense scrutiny since the 2022 collapse of Terra Luna, a cryptocurrency ecosystem he co-founded. The crash wiped out $40 billion in market value, leading to allegations of fraud, market manipulation, and securities law violations. Both the United States and South Korea have requested his extradition to face charges.
Impact of Terra Luna’s Collapse
The Terra Luna crash is considered one of crypto’s most significant failures. It eroded investor trust in stablecoins and decentralized finance (DeFi), triggering regulatory crackdowns worldwide. Kwon was arrested in Montenegro in March 2023 for attempting to use a forged passport.
SEC Fraud Lawsuit
In April, a U.S. court held Terraform Labs and Kwon accountable for fraud after a case brought by the Securities and Exchange Commission (SEC). The charges included misleading investors and mismanaging funds. Terraform Labs later agreed to a $4.47 billion settlement, including fines and interest payments. Kwon personally faced penalties totaling $204.3 million.
Montenegrin Prime Minister’s Alleged Involvement
Controversy arose when court documents revealed that Montenegrin Prime Minister Milojko Spajic had invested $75,000 in Terraform Labs back in 2018. Spajic, who took office in October 2023, had previously denied any involvement until the SEC disclosed his name as an early investor.
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