US Prosecutors to Appeal Montenegrin Courtโs Decision to Extradite Do Kown to South Korea
US prosecutors are planning to appeal the decision of the Montenegrin High Court to extradite former cryptocurrency mogul Do Kwon to South Korea. Kwon is facing charges related to the $40 billion collapse of the TerraUSD stablecoin in 2022. The US Justice Department stated that it will continue to seek Kwonโs extradition in accordance with international agreements and Montenegrin law. The court ruling may be seen as a victory for Kwon, as his lawyers have expressed a preference for him to be extradited to South Korea. However, some legal experts in the crypto industry have raised doubts about this decision.
Do Kwon Remains in Custody in Montenegro
Do Kwon, co-founder of Terraform Labs Pte, was arrested in Montenegro in March 2023 for using a fake passport. His arrest triggered competing extradition requests from prosecutors in Seoul and New York. While the court ruling may be viewed as a victory for Kwon, some legal experts have raised doubts about the decision.
Terrence Yang, a managing director at Swan Bitcoin and former counsel at Merrill Lynch, called the ruling โa travestyโ and questioned the wisdom of sending Kwon to South Korea. He believes that the US has a larger number of victims and dollar amount involved in the case. The SEC has been pursuing a civil case against Terraform Labs and Kwon, linking their operations to an alleged $40 billion cryptocurrency fraud.
Kwonโs legal team has filed an appeal against the Montenegrin High Courtโs decision to uphold both extradition requests from the United States and South Korea. Additionally, his representative in Montenegro has argued in favor of his extradition to South Korea over the United States.
Terraform Labs Files for Bankruptcy
Terraform Labs, the company co-founded by Do Kwon, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The filing cited estimated assets and liabilities between $100 million and $500 million. The company stated that the bankruptcy protection filing would enable them to pursue an appeal against the SECโs securities fraud lawsuit.
Terraform Labs CEO Chris Amani emphasized the importance of bankruptcy protection for the companyโs operations and the preservation of value for stakeholders, including the Terra community. The bankruptcy protection is critical to the companyโs ability to operate as a going concern, preserve value for its creditors and stakeholders, provide an orderly process for resolving competing claims against it, and pursue an appeal of the SEC Enforcement Action.
Hot Take: US Prosecutors Continue Fight for Extradition
US prosecutors are not giving up on their efforts to extradite Do Kwon to South Korea to face charges related to the collapse of TerraUSD stablecoin. Despite the Montenegrin High Courtโs decision to allow Kwonโs extradition, the US Justice Department plans to appeal the ruling. While Kwonโs lawyers prefer him being extradited to South Korea, some legal experts have expressed doubts about this decision.
The bankruptcy filing by Terraform Labs adds another layer of complexity to this case. The company is seeking bankruptcy protection in order to pursue an appeal against the SECโs securities fraud lawsuit. This move is seen as crucial for preserving value for stakeholders and allowing an orderly process for resolving competing claims.
It remains to be seen how this legal battle will unfold and whether Do Kwon will ultimately be extradited to South Korea or face trial in the United States. The outcome of this case could have significant implications for both Kwon and the crypto industry as a whole.
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