Authorities in Montenegro will release the co-founder of Terraform Labs, Do Kwon, as local courts decide his fate regarding extradition to the United States or South Korea.
Related: The Vacation in Montenegro Is Over: Ex-CFO Terraform Labs Extradited To South Korea
According to Bloomberg, he was released on Saturday, March 23rd. The Supreme Court intervened, suspending the lower court’s decision and halting the extradition of the Terraform Labs co-founder to South Korea. Prosecutors reportedly plan to seize the South Korean passport of the Terraform Labs co-founder, although in 2023 he allegedly used a fake Costa Rican passport in Montenegro.
Kwon will be allowed to leave jail on March 23rd after spending nearly a year behind bars, but he was required to surrender his travel documents to prevent him from leaving the country, reports the Montenegrin news agency Vijesti.
As reported, the prison director Darko Vukčević said:
We let Do Kwon out of jail because his regular stint for traveling with fake documents has ended. Since he’s a foreign national and his documents were confiscated, he was taken in for questioning at the Foreigners’ Affairs Police Department, and they’ll handle him from there.
Kwon’s lawyer, Goran Rodić, also confirmed his release. According to state television, Kwon’s passport was confiscated to prevent him from leaving the country. Later on Saturday, Kwon was transferred to a shelter for foreigners, as reported by state television citing Rodić, who mentioned plans to appeal to keep Kwon out of custody until the extradition decision is made.
The Accusations Against Do Kwon
Kwon found himself in custody in March 2023 in Montenegro after being apprehended for utilizing counterfeit travel documents, alongside his colleague, the former CFO of Terraform Labs, Han Chang-joon.
Currently, Kwon faces charges of fraud both in South Korea and the USA, stemming from the collapse of Terra, which led to approximately $60 billion loss in market value in 2022.
Co-founder of Terraform Labs, Shin Hyun-Seong, also known as Daniel Shin, and other individuals associated with the platform, are facing criminal charges for fraud with investors in court. Shin remained in South Korea after the Terra collapse in May 2022, an event that subjected the platform to rigorous scrutiny by regulators and contributed to a significant crypto market downturn.
USA or South Korea? Where’s the Softest Pillow?
The USA and South Korea have filed competing extradition requests to charge Kwon with fraud in their respective countries, but a final decision has yet to be made.
In South Korea, punishments are relatively softer compared to the USA, where prosecutors are aiming to hold Kwon accountable for the collapse of the algorithmic stablecoin TerraUSD worth $40 billion in 2022. If extradited to the USA, the Terraform Labs co-founder is likely to face eight criminal charges brought by prosecutors in March 2023.
The Supreme Court’s decision followed the Balkan country’s chief prosecutor’s protest, citing procedural errors in the decisions supporting South Korea’s request. The extradition process to either country is pending further court deliberation, and no specific timelines have been provided following the announcement made on Friday.
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As Kwon steps out of jail, he finds himself at the center of a transcontinental legal battle, with both the United States and South Korea vying to hold him accountable for alleged fraud. The decision on his extradition remains pending, the future remains uncertain for Do Kwon and his co-defendants.
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