SEC has provided Montenegro’s Ministry of Justice with materials on the Terra creator’s fraud case

What’s new? Representatives of the US Securities and Exchange Commission (SEC) have provided the Montenegrin Ministry of Justice with the results of their investigation into Terraform Labs (TFL) founder Do Kwon. The Ministry of Justice’s press release did not disclose the list of issues discussed at the meeting with the SEC, but the meeting itself may indicate progress on the businessman’s extradition.

Press release from the Ministry of Justice

What else is known? Montenegrin authorities have been deciding for months where Do Kwon will be extradited to — the United States or South Korea. In both countries, the businessman faces fraud charges in connection with the collapse of TFL’s Terra blockchain ecosystem, including its TerraUSD stablecoin and LUNA token, which caused tens of billions of dollars in losses to investors around the world.

Without elaborating on the details, the Ministry of Justice noted it had discussed the litigation with the SEC, as well as broader investor protection issues in the digital asset sector. In the US, a jury found Kwon guilty in a civil fraud lawsuit filed by the SEC in February 2023. The SEC is seeking $5,3 billion in fines in the same lawsuit.

After the collapse of Terra in May 2022, Kwon went on the run and was only apprehended in March 2023 at Podgorica airport while trying to fly to Dubai on a fake passport. For this he received four months in prison in Montenegro and was released in March this year. Kwon had his real passport confiscated, restricting his ability to leave the country.

Since his detention, US and South Korean authorities have been trying to get the businessman extradited for trial in their jurisdictions. The court initially ordered the extradition of the businessman to the US, but after an appeal changed the decision in favor of Korea, as it was the first to request extradition.

However, later the Montenegrin Prosecutor General’s Office accused the court of violating procedural norms and exceeding its authority. Thus, a representative of the prosecutor’s office was not heard at one of the sessions, while the decision on extradition can only be made by the Ministry of Justice, the petition explains. In this regard, the Supreme Court of Montenegro postponed the extradition of Kwon to Korea until the end of the petition.

It was noted that many Korean investors are in favor of Kwon’s extradition to the US, as he faces a harsher punishment there. Thus, in March of this year, the US court sentenced the founder of the bankrupt crypto exchange FTX Sam Bankman-Fried to 25 years in prison for fraud for $8 billion.