Montenegro's Constitutional Court has officially dismissed an appeal by Terraform Labs co-founder Do Kwon regarding his extradition, upholding the earlier ruling that favored his extradition.
Legal Battles After Terra-Luna Collapse
The legal battle began unfolding after the Terra-Luna crypto ecosystem collapsed in May 2022, wiping out approximately $40 billion in market value. This event sparked investigations into alleged fraud, market manipulation, and violations of securities law. Kwon was arrested in Montenegro in March 2023 while attempting to use a forged passport. The collapse shook investor confidence in stablecoins and decentralized finance, prompting regulatory crackdowns worldwide.
Terraform-SEC Lawsuit
In June, Terraform Labs agreed to pay the SEC around $4.47 billion as part of the settlement with the US securities regulator for its collapse, erasing $40 billion in investor assets. The remedies included disgorgement fines of around $3.6 billion, a $420 million civil penalty, and almost $467 million in pre-judgment interest.
Montenegrin PM Involvement with Terraform Labs
Nearly a week following the settlement with the SEC, findings from an April court document sparked controversy around the involvement of Montenegrin Prime Minister Milojko Spajic in the crypto firm. Reports indicated that Spajic, who assumed office in October 2023, had invested $75,000 to purchase 750,000 Terra (LUNA) tokens from the collapsed firm back in April 2018.
The decision by Montenegro's court marks a significant precedent in international extradition practices for cases related to cryptocurrency crimes, highlighting the importance of legal accountability in the industry.
