The Montenegro Court of Appeal has overturned the decision made by the Podgorica High Court to approve the extradition of Do Kwon, former CEO of Terraform Labs, to the United States or South Korea. In a statement released on December 14, the appellate court ruled the extradition approval was invalid due to a procedural error.

The court ruled that the investigating judge failed to follow legal requirements by failing to hear Kwon's defense of the U.S. extradition request during the hearing. Consequently, the court has ordered a retrial of the case, directing it back to the Podgorica Basic Court.

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Legal Background

The High Court of Podgorica approved Kwon's extradition to Montenegro in November 2023, following the fulfillment of necessary legal conditions. According to reports, Montenegro's Justice Minister was inclined to extradite Do Kwon to the United States. 

However, the latest ruling indicates that Kwon's defense effectively challenged the initial decision, leading to the nullification and retrial order. If the extradition is eventually sanctioned, the final verdict rests with the Minister for Justice in Montenegro. 

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Extradition Request and Allegations

The extradition requests from the United States and South Korea stem from criminal charges related to the collapse of Terraform Labs, Kwon's multibillion-dollar cryptocurrency company, in May 2022. 

According to the Securities and Exchange Commission (SEC), Kwon and Terraform Labs orchestrated a fraudulent scheme that lost at least $40 billion in market value.

However, Kwon's legal issues in Montenegro extend beyond the extradition proceedings. The former Terra CEO has been arrested and sentenced to prison in the country on charges of possessing falsified official documents.