Do Kwon Faces Defeat Amid Extradition Rumors After Montenegro Rejects Appeal In Fake Passport Case

Do Kwon, the embattled CEO and co-founder of the blockchain firm Terraform Labs (TFL), has experienced another major loss in court after the Higher Court of Podgorica in Montenegro denied his appeal to overturn a passport fraud conviction, making his extradition to either the U.S. or South Korea seem imminent.

Kwon and his associate Han Chang-Joon were found guilty of forging passports in June, which led to a four-month prison sentence.

Kwon's camp recently appealed the court's decision, but instead of siding with the crypto executive, the higher court affirmed the verdict and highlighted the accurate determination of facts and proper application of the country's criminal code.

Moreover, authorities in South Korea and the U.S. have warrants and charges filed against Kwon in connection with the controversial implosion of Terra, which was triggered when the so-called algorithmic stablecoin TerraUSD (USDT) de-pegged from the dollar, bringing down along with it the value of LUNA, Terra ecosystem's native cryptocurrency.

In the U.S., the cases against Kwon were filed by the Securities and Exchange Commission (SEC) and multiple criminal charges by the Department of Justice.

The head prosecutor of the cases filed against Kwon said that if extradited to South Korea, the disgraced CEO would most likely face the highest prison sentence in the country for committing financial crimes.

Unlike FTX co-founder and former CEO Sam Bankman-Fried, who was immediately extradited from the Bahamas to the U.S. just weeks after stepping down from his position and filing for bankruptcy, Kwon was imprisoned in Montenegro for possession of falsified travel documents.

Kwon, who maintained that he was not on the run, fled Singapore in September 2022 when a warrant in his home country was issued. He was reportedly on Interpol's red notice list, and he was accused of withdrawing funds from a Bitcoin ATM, as well as moving funds that authorities are still tracking.

Initially, Kwon was set to pay around $436,894 to be released on bail. However, the deal did not push through. He is reportedly being held at Spuž prison near the Montenegrin capital of Podgorica.

Late in October, Kwon's camp asked a U.S. court to dismiss the securities fraud lawsuit filed by the SEC against them.

In the summary judgment filed with the U.S. District Court for the Southern District Of New York last week, Kwon's camp argued that the SEC failed to prove that TFL was selling securities or committing fraud, adding that the regulator could not provide evidence to support its claims in the lawsuit.