In a surprising twist of events, the Montenegro appeals court has invalidated the previous decision by the country’s high court regarding the extradition of Do Kwon, co-founder of Terraform Labs.

This development could have significant ramifications for Kwon, who was facing potential extradition to either the United States or South Korea.

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The Appellate Court of Montenegro, in a ruling issued on December 14, annuled the earlier approval for Kwon’s extradition, a decision that has sent shockwaves through the cryptocurrency community. The official announcement was made on December 19.

Initially, the High Court of Podgorica had determined in November 2023 that the legal prerequisites for Kwon’s extradition were met, leaving the final decision on extradition to the Montenegrin Minister of Justice.

However, Kwon’s defense team has successfully contested this decision, leading to this significant turn of events.

The Appellate Court’s panel meticulously reviewed the previous judgment from the High Court of Podgorica and found a violation of the provisions of Montenegro’s Criminal Procedure Code.

The court emphasized that the appeal by Kwon’s defense attorneys highlighted that the earlier decision lacked clear and reasonable justifications. In their statement, the court noted:

<…> Violation is reasonably indicated by the appeal of the defendant’s defense attorneys, because the decision does not have reasons for decisive facts, and the reasons given are unclear, which is the reason for its cancellation.

Terraform Labs suffered a severe setback in May 2022, with substantial losses incurred. The United States Securities and Exchange Commission (SEC) alleged that Terraform Labs and Kwon were involved in a fraudulent scheme that resulted in a loss of over $40 billion in market value.

Kwon’s arrest in Montenegro in March 2023, as he attempted to use forged travel documents to leave the country, triggered extradition requests from both the US and South Korea.

This legal battle holds significant implications for Kwon, who could potentially face multiple charges in both countries. The outcome of the retrial in Montenegro is being closely watched by cryptocurrency enthusiasts and legal experts alike.