The Supreme Court of Montenegro on April 5 overturned the extradition of reputed "cryptocurrency king" Do Kwon to South Korea and referred the case back to the Higher Court in Podgorica.
Do Kwon is sought by the United States and South Korea for his alleged role in capital-market and securities fraud involving assets worth some $40 billion.
He is the founder of TerraformLabs, which was behind a cryptocurrency called TerraUSD that collapsed in May 2022, dealing a blow to digital-currency markets.
Do Kwon, described as Kwon Do Hyeong in court documents, was arrested on March 23, 2023, at Podgorica airport while attempting to fly to Dubai using a fake passport. He served a four-month sentence for forgery and was transferred to a detention center near Podgorica to await a decision on extradition.
The Montenegrin courts have issued a tangle of contradictory decisions since U.S. and South Korean officials requested his handover in the days after his detention.
The decision to extradite the South Korean national to his home country rather than the United States was made by the Higher Court and later confirmed by the Court of Appeal.
But the Supreme State Prosecutor's Office (SSPO) on March 21 disagreed and sought a ruling by the Supreme Court.
Under the Supreme Court ruling issued on April 5, it is up to the Higher Court to determine whether the legal conditions for Do Kwon's extradition to South Korea and the United States have been met after which the justice minister, not the court, will decide on extradition.
The SSPO said the previous decision to extradite Do Kwon to South Korea violated the law because it was decided in an "expedited" procedure, which is applied only in extradition cases in which only one extradition request has been submitted.
When there are multiple requests, the regular extradition decision-making procedure is applied, the SSPO said. This requires the final decision to be made by the justice minister.
Justice Minister Andrej Milovic made the first legal interpretation on the extradition question. It said t Do Kwon would be extradited to the United States because it was first to request his extradition in a note sent on March 25, 2023, by the U.S. Embassy two days after Do Kwon was arrested. South Korea submitted its extradition request the next day.
South Korean authorities have accused Do Kwon of fraud and violating capital-market laws. Do Kwon's business partner was handed over to South Korea in February.
The U.S. Securities and Exchange Commission (SEC) has accused Do Kwon of organizing a securities fraud involving cryptocurrency assets worth billions of dollars.
A jury in New York City on April 5 found Terraform Labs and Do Kwon liable on civil fraud charges, agreeing with the SEC that they misled investors before the collapse of their cryptocurrency.
There has been no comment from Do Kwon's lawyer, Goran Rodic, on the Supreme Court ruling or on the ruling in New York.
Louis Pellegrino, an attorney for Terraform Labs, told the jury that the SEC's case relied on statements taken out of context and that Terraform Labs and Do Kwon had been truthful about their products and how they worked even when they failed.