Do Kwon’s Fate in the Balance: Montenegro Delays Release, US & Korea Eye Custody

Published December 14, 2023 2:25 PM

By Teuta Franjkovic

Do Kwon will stay in Montenegrin jail until February | Credit: Shutterstock

Key Takeaways

Do Kwon’s detention has been extended by two months amidst extradition requests from the US and South Korea.
The Terra founder’s arrest and legal proceedings stem from the failure of Terraform Labs’ cryptocurrency project.
This extradition and legal proceedings could set important precedents for the regulation of the cryptocurrency market.

Founder and former CEO of Terraform Labs, Do Kwon’s detention and recent ensuing legal actions against him are a result of the notable failure of Terraform Labs’ crypto venture, an event that had a considerable impact on the cryptocurrency market.

Now, the Montenegro High Court has extended the detention of Do Kwon for an additional two months.

Do Kwon’s Detainment Extended as Extradition Requests Loom

The Montenegro High Court’s recent decision to extend Do Kwon’s detention by two months has brought renewed attention to the case. As reported, this extension, setting Kwon’s custody until February 15, 2024, arises amidst extradition requests from both the U.S. and South Korea.

Initially, the High Court had ruled in favor of Kwon’s extradition, leaving the final decision on his destination to Montenegro’s justice minister. However, Kwon’s defense team appealed this, leading to its current consideration by an appellate court in Podgorica. This development adds another layer to the already complex legal situation surrounding Kwon.

?CRYPTO WEEKLY ?

?"Montenegrin Authorities Extend Terra Co-founder Do Kwon's Custody Until February"

Do Kwon, the co-founder of Terraform Labs, remains in Montenegro's custody until February, awaiting possible extradition to the U.S. or South Korea.

Arrested for falsifying…

— Kane Jules Difelice ⚔️ Orivium (@JulesKane) December 13, 2023

Do Kwon’s arrest and the subsequent legal proceedings stem from the dramatic collapse of Terraform Labs’ cryptocurrency project. The failure of Terraform’s algorithmic stablecoin, TerraUSD (UST), and its sister token, LUNA, in May last year resulted in billions of dollars in losses for investors worldwide. This collapse raised serious questions about the stability and reliability of algorithmic stablecoins. This has led to heightened scrutiny from regulatory bodies and investors alike.

Legal Woes Mount as Global Prosecutions Loom

The US and South Korea have both shown an interest in extraditing Kwon for charges relating to the collapse of Terraform Labs. In the US, Kwon faces allegations of fraud and potential violations of securities laws. Meanwhile, South Korean authorities want to examine his role in Terra’s collapse and potential breaches of local financial regulations.

The extradition and legal proceedings surrounding Do Kwon are being closely watched by the global crypto community. They could set precedents for the treatment of crypto entrepreneurs and the regulation of the cryptocurrency market. The case highlights the growing intersection between international law, financial regulation, and the rapidly evolving world of digital currencies.

Richard means “Hard Ruler.” Heart means passionate. Win means dedicated. I don’t give up. I win. You’ve watched the dead bodies of those who thought were smart float on down the river. Mashinsky, SBF, Do Kwon, Su Zhu. They’re all in jail now. And what did they all have in common?… pic.twitter.com/QvNeN1vWJh

— Richard Heart (@RichardHeartWin) October 14, 2023

As the legal battle continues, the industry is observing how nations navigate regulating a technology that transcends traditional borders. The outcome could have far-reaching implications for the future of cryptocurrency regulation and the responsibilities of everyone involved.

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About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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