Do Kwon’s Extradition Cleared; Where Will He Face Justice?

• TerraForm Labs founder Do Kwon has once again been approved for extradition.
• Montenegro’s Minister of Justice will make the final decision on the destination.
• The Securities Exchange Commission started the trial without Kwon’s presence.

The controversial cryptocurrency entrepreneur Do Kwon was recently found liable in the customer defrauding case initiated by the Securities and Exchange Commission (SEC). After serving a four-month sentence for document forgery in Podgorica, Montenegro, Kwon’s next destination is becoming a hot topic among crypto enthusiasts and legal bodies.

While the United States, South Korea, and Singapore have all claimed their rights to take over Kwon’s prosecution, the extradition process has faced several challenges. Famously, Kwon scored a win in early March 2024 when the Montenegrin Appellate Court overturned a lower local court’s decision to deport him.

However, the tables have turned again, as Kwon has been cleared for another extradition attempt. This was first revealed in one of South Korea’s newspapers, which stated that the Montenegrin Court had finally passed the ball to Montenegro’s Minister of Justice rather than the Podgorica Court, which is only competent at determining if the extradition request is compliant with the legal standards.

The United States to Handle Do Kwon’s Case?

As Do Kwon’s fate is now in the hands of Justice Minister Andrei Milovič, the crypto community is assessing the most likely destination. Most crypto enthusiasts and legal professionals expect to see Kwon being brought to justice in the United States by the Securities and Exchange Commission (SEC).

While the SEC granted Kwon’s and TerraForm Labs trial delay earlier this year, the lenience was short-lived. The SEC initiated the first trial hearing without his presence. Labeling TerraForm Labs as a ‘House of Cards,’ the SEC’s representatives initiated a trial in Manhattan on March 25, 2024.

On the Flipside

• In December 2023, Judge Rakoff granted the SEC a partial win due to sufficient evidence that TerraForm Labs had participated in unregistered security sales, including LUNA, MIR, and UST tokens.
• However, TerraForm Labs’ defense argued that none of Terra’s cryptocurrencies should fall under the security category, insisting that “failure doesn’t equal fraud.”

Why This Matters

The highly-publicized TerraForm Labs vs. the SEC case has the potential to bring closure to subjugated investors who have been exposed to the $40 billion Terra Luna crash in May 2021.

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