Montenegro’s court has revoked the extradition order for Terraform Labs co-founder Kwon Do-hyung, returning the case to the first-instance court, also known as the initial court where a legal case is brought for trial.
The court’s acceptance of Kwon’s appeal annuls the high court’s decision in December, which had previously green-lighted Kwon’s extradition to his home nation of South Korea or the United States.
The Montenegro Court of Appeals said in a press release published Thursday that the higher court’s decision lacked reasoning, warranting the annulment. The decision follows Wednesday’s council session.
Kwon, who has been on the run since the implosion of the blockchain network he founded, Terra, was arrested in Montenegro under a false passport in late March.
Both South Korea and the United States are vying for the extradition of Kwon, whom both countries have charged for an alleged cryptocurrency fraud scheme related to the Terra-LUNA fiasco of May 2022.
The Terra-Luna collapse is remembered as an event that directly caused approximately US$40 billion in losses for investors, while the contagion that followed resulted in the bankruptcies of numerous crypto firms.
Han Chang-joon, Kwon’s lieutenant and former finance chief of Terraform Labs who was arrested by Montenegrin authorities alongside Kwon for traveling with falsified documents, was extradited from Montenegro on Monday to South Korea.
South Korea has accused Han of misleading investors by selling Luna coins for at least 53.6 billion won (US$40 million) under the pretense that the Terra project was functioning normally. The prosecution believes Han and co-conspirators deceived investors worldwide, according to local media outlet Yonhap News Agency.
Criminals in South Korea who profit over 5 billion Korean won (US$3.76 million) from crypto-related illicit activities will face a maximum penalty of life in prison under the nation’s new consumer protection rule set to take effect from July 19.
Additionally, Han faces charges for selling Luna coins without a securities registration statement and illegally recording and leaking about 100 million electronic financial transaction details of Chai Pay customers on the Terra blockchain without consent.