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Montenegrin court rejects extradition order for cryptocurrency tycoon
Seoul and Washington have called for the extradition of South Korean businessman Do Kwon for his suspected role in fraud linked to the dramatic collapse of his company, Terraform Labs, which wiped out about $40 billion in investor money and rattled markets global cryptocurrencies.
An appeals court in Montenegro on Friday overturned an order to extradite cryptocurrency entrepreneur Do Kwon to South Korea, where he is wanted over the multibillion-dollar collapse of the Terraform Labs company.
For months, Seoul and Washington have sought the South Korean’s extradition over his suspected role in fraud linked to his company’s dramatic collapse, which wiped out about $40 billion in investor money and rattled global cryptocurrency markets.
Montenegro’s Court of Appeal said it had upheld “the appeals of the defendant Kwon Do-hyung and his defense lawyers, revoking the decision of the High Court of Podgorica.”
The ruling added that the case will be reported to the “first instance”. Court for a new trial and decision.”
The decision came weeks after a series of previous court rulings in the Balkan country appeared to pave the way for the Terraform founder’s extradition.
The cryptocurrency tycoon, whose real name is Kwon Do-hyung, had been on the run for months after fleeing South Korea and then Singapore before the company’s collapse in 2022.
He was arrested together with an accomplice in Montenegro in March last year.
Montenegro already deported Kwon’s business partner, identified only by his initials JCH, to South Korea in early February.
The company’s TerraUSD was marketed as a “stablecoin,” a token pegged to stable assets like the US dollar to avoid drastic fluctuations.
Do Kwon has successfully marketed them as the next big thing in cryptocurrencies, attracting billions in investment and global hype.
The media in South Korea described him as a “genius”.
But despite billions in investment, TerraUSD and sister token Luna entered a death spiral in May 2022.
Experts said Kwon had set up a glorified Ponzi scheme, in which many investors lost their life savings.
He left South Korea before the crash and spent months on the run, eventually ending up in custody in Montenegro after trying to board a flight with fake Costa Rican travel documents.
In January, Terraform Labs officially looked protection in the event of bankruptcy in the United States.
Filing for bankruptcy would allow Terraform “to execute its business plan while navigating ongoing legal proceedings, including pending representative litigation in Singapore and litigation in the United States involving the Securities and Exchange Commission,” the company said in a statement.
The company said it also intends to “meet all financial obligations to employees and suppliers.”
Cryptocurrencies have come under increasing scrutiny from regulators after a series of controversies over the past year, including the high-profile collapse of the FTX exchange.
© 2024AFP
Citation: Montenegro Court Rejects Extradition Order for Crypto Tycoon (May 24, 2024) Retrieved May 25, 2024, from https://techxplore.com/news/2024-05-montenegro-court-extradition-crypto-tycoon .html
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