Terraform Labs' Co-Founder Do Kwon's Extradition Blocked, Found Fraudulent in SEC Lawsuit

By: Eliza Bennet

The Supreme Court of Montenegro has blocked the extradition of Terraform Labs' co-founder, Do Kwon, overturning previous rulings and ordering a new review of the case. This decision follows procedural errors in the initial handling of the complex extradition case, leading to repeated blocks in the proceedings.

The new ruling demands an individual assessment of the legality of each extradition request, with the Minister of Justice holding the authority for final decisions based on thorough legal analysis. The extradition process has been stalled multiple times, and it remains uncertain if the Ministry's decision to extradite Kwon to the US would persist after the High Court's reevaluation.

Kwon's legal troubles began after the 2022 collapse of his crypto project, LUNA, erasing around $40 billion in market value and leading him to face fraud accusations. As a result, Kwon became a wanted man in multiple countries, highlighting the increased global regulatory scrutiny on crypto industry activities.

Aimed specifically, in a lawsuit brought on by the US Securities and Exchange Commission (SEC), a New York jury found Kwon and Terraform Labs liable for misleading investors about the stability of their 'algorithmic stablecoin' Terra USD. The outcomes of these cases underscore complex issues surrounding legal jurisdictions and regulatory oversight in the digital economy.