Do Kwon failed in his appeal for extradition to Korea
The Terraform Labs co-founder's lawyer said this is the final decision and cannot be appealed by Do Kwon or the US side.
Continuing the series of events of "fighting" for the right to extradite the co-founder of Terraform Labs, the Montenegrin Court of Appeals recently rejected Do Kwon's extradition appeal, allowing the Korean side to extradite to face criminal charges. criminal charges related to the collapse of his algorithmic stablecoin in May 2022.
The Montenegro Court's latest ruling came after the decision to extradite Do Kwon to Korea in early March, and the Terraform Labs co-founder's lawyer filed an appeal.
The Montenegrin Court of Appeal made the final decision to extradite the co-founder of Terraform Labs to Korea, rejecting Do Kwon's previous appeal.
Korean authorities have been investigating Do Kwon and Terraform Labs since June 2022, just 1 month after the collapse of the algorithmic stablecoin, wiping out the total capitalization of 60 billion USD of the two coins LUNA and stablecoin UST.
Korean authorities stepped up the collection of evidence, interviewed former project employees and investigated Terraform Labs when the collapse occurred, mainly targeting allegations of tax evasion. At that time, the former CEO of Terraform Labs affirmed that he was "fully responsible for Terra's failure" and hired a lawyer in Korea to prepare to face the legal wave. However, at that time Do Kwon was said to be in Singapore, but Singapore police said that Do Kwon had disappeared from here.
In March 2023, Do Kwon was arrested at Podgorica airport (Montenegro) along with former Terraform Labs Chief Financial Officer Han Chang-joon, and received a 4-month prison sentence for using a fake passport to leave the country.
From March 2023 - March 2024 is the time when Do Kwon was "competed" for extradition by both the US and South Korea.
Many people believe that extradition to the US will create favorable conditions for the lawsuit by the US Securities Commission and a series of criminal indictments placed by the Department of Justice on Do Kwon and Terraform Labs.
The Korean government wants to criminally prosecute Do Kwon in the financial sector for many crimes including securities fraud.
However, the co-founder of Terraform Labs has repeatedly successfully escaped extradition to the US and Korea before. According to Bloomberg, Do Kwon's lawyer Goran Rodic said the extradition to Korea is the final decision of the Montenegrin Court, and neither the US nor Do Kwon can appeal this verdict. However, there is still no specific time to "return" Do Kwon to Korea.
This is also the result of efforts from the Korean National Police Agency, and the Korean Ministry of Justice through Interpol to request Do Kwon's extradition to return for trial in the "land of kimchi".
Previously, the Securities and Exchange Commission (SEC) suspected that Terraform Labs had transferred $166 million to reduce the amount of assets that had to be declared when filing for bankruptcy, as well as to prepare for a legal "battle" with authorities. America.
Latest update from the SEC's legal battle with Terraform Labs, the Securities and Exchange Commission in a filing on February 27 said that the controversial company had "suspicious transactions" before filing for bankruptcy.
The SEC claims that Terraform Labs transferred a total of $166 million to Dentons' holding account, with $122 million of that transferred within the 90 days before Terraform Labs filed for bankruptcy on January 22, 2019. 2024.
According to the SEC, this move is intended to reduce the number of assets held by the company when declaring bankruptcy. As well as being used as a "slush fund" for lawyers to pursue long-term litigation with the SEC.
Dentons US LLC is serving as special counsel in the bankruptcy of Terraform Labs. But because it discovered suspicious signs, the SEC asked the Delaware court, which handled the bankruptcy filing, to no longer allow Dentons to represent Terraform Labs, unless they returned all the money.
It is known that 81 million USD is still in Dentons' advance account.
Also according to the SEC, the money in this account appears to be to cover bills for consulting Do Kwon on criminal conduct in Montenegro - which is not related to bankruptcy handling like the role Dentos was given.
In the bankruptcy filing, Terraform Labs claims both assets and liabilities are currently between $100 and $500 million. The company said bankruptcy protection would allow it to pursue its fight with the SEC.
As Coin68 reported, the US court sided with the SEC in recognizing the argument that LUNA and UST were securities, and therefore Terraform Labs violated US law by offering these coins to US investors. without going through the SEC.
The trial of former CEO Do Kwon has been moved to March 2024, most likely with the presence of the "author" after the Montenegrin court's decision to extradite Kwon to the US, instead of Korea.
Additionally, the New York Court sided with the SEC and recognized the argument that tokens issued by Terraform Labs such as LUNA and UST were disguised securities.
According to the results of the trial released on December 28 (US time), the Southern District Court of New York ruled in favor of the SEC, the unit that is suing Terraform Labs and its founder Do Kwon for allegedly offering Illegal sale of securities.
Specifically, the court said that the LUNA, UST, wLUNA and MIR tokens in the Terra ecosystem were disguised securities, and Terraform Labs violated the law by offering them to US investors without registering with the SEC.
However, the court rejected the US Securities and Exchange Commission's allegations that Terraform Labs provided securities trading services related to the above currencies.
This can be seen as the latest turning point in the lawsuit, which will continue to hear the remaining charges in January 2024.
Previously, the SEC sued Terraform Labs and founder Do Kwon in February 2023, related to the LUNA-UST collapse in May 2022, which caused more than 60 billion USD in value to be evaporated from the cryptocurrency market. chemistry.
The SEC accused Do Kwon and Terraform Labs of creating a “multibillion-dollar cryptocurrency securities fraud scheme,” luring hundreds of thousands of investors through offering deals. sell unregistered securities.
Do Kwon was arrested by the Montenegrin government in March 2023 and sentenced to 4 months in prison for passport forgery. This person is still waiting for the Montenegrin court to make a decision on extradition to the US or Korea, both countries have issued criminal indictments accusing this person for the collapse of LUNA-UST.
Terraform Labs has been trying for the past year to shift responsibility for the LUNA-UST collapse onto other organizations, but has been unsuccessful.
The LUNA token price is slightly decreasing at the time of writing, but it is likely to follow the current adjustment direction of the cryptocurrency market and not be much affected by the US court's securities ruling.
