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Since the arrest of Do Kwon, both the United States and South Korea have submitted extradition requests, setting the stage for a legal war between the two countries.
The legal battle surrounding the extradition of Do Kwon, the co-founder of the now collapsed cryptocurrency company Terraform Labs, has taken a different turn as Montenegrin prosecutors are challenging a court’s decision to extradite him to South Korea, suggesting that the country’s Supreme Court may ultimately change the outcome.
Kwon, a South Korean citizen, has been at the center of a cryptocurrency scandal that has attracted global attention. He was arrested in Montenegro in March 2023 during his travels to Dubai for using fake travel documents and subsequently sentenced to four months in prison. The whole saga started after the crash of TerraUSD and Luna, as well as the loss of over $40 billion in the crypto market in 2022.
Since his arrest, both the United States and South Korea have submitted extradition requests for Kwon, setting the stage for a legal war between the two countries. Initially, it appeared that he would be extradited to South Korea, where authorities have been cracking down on cryptocurrency-related crimes.
However, the Montenegrin prosecutors have thrown a curveball into the proceedings. They have asked the country’s Supreme Court to intervene, arguing that only them have the authority to make the final decision on Kwon’s extradition, not the lower court. They believe that the lower court erred by ruling on the extradition permit when, in their view, such a decision should be made solely by the Minister of Justice.
In a statement released by the Supreme State Prosecutor’s Office, the file stated:
“In the specific case, the court, contrary to the law, conducted abbreviated proceedings instead of regular proceedings and by exceeding the limits of its powers, made a decision on the extradition permit, which is the exclusive competence of the Minister of Justice.”
Kwon’s potential extradition to the United States or South Korea has been the subject of intense speculation and debate within the cryptocurrency community. Although it already seems that Kwon would prefer extradition to South Korea over any other country, the decision is solely for the Montenegrin Supreme Court to make.
Kwon’s decision to be extradited to South Korea rather than the United States could stem from various factors, such as weighing the severity of punishments in each jurisdiction and carefully considering the legal circumstances. Another significant aspect may be his South Korean citizenship. However, it is worth noting that if the extradition to South Korea occurs after July, he could possibly face life imprisonment under the proposed consumer protection rules in South Korea, set to take effect in July 2024.
South Korea and the US Crack Down on Crypto Crimes
Also, in South Korea, authorities have taken a hard line against cryptocurrency-related misconduct. Several individuals connected to Terraform Labs, including co-founder Hyun-seong Shin, have been accused of wrongdoing. Kwon’s associate, Han Chang-joon, was arrested in Montenegro alongside Kwon but has already been extradited to South Korea.
Just as the South Korean government is trying to enforce regulations on crypto crime, the United States has also been actively prosecuting notable figures within the industry, including high-profile figures such as Sam Bankman-Fried, founder of the collapsed FTX exchange, as well as Changpeng Zhao, former Binance CEO, amongst others.
