Montenegro's Constitutional Court has dismissed an appeal by South Korean crypto entrepreneur Do Kwon concerning his extradition verdict.

In a unanimous decision, the court rejected Kwon's appeal, citing legal issues, as reported by Korea JoongAng Daily. This decision assigns Montenegro's justice minister the responsibility of determining whether Kwon will face trial in South Korea or the United States. Extradition to the U.S. currently seems more likely, given the ministry's stance.

The Infamous Terraform Collapse and the Legal Battles of Do Kwon

Terraform Labs, founded by Do Kwon, introduced the algorithmic stablecoin TerraUSD (UST) and its companion token Luna. These assets gained significant popularity, positioning Terraform as a trailblazer in decentralized finance.

However, in May 2022, (UST) lost its peg to the U.S. dollar due to design flaws and unfavorable market conditions. This collapse triggered a rapid decline in Luna's value, wiping out $45 billion in market capitalization within days and leaving investors with significant losses.

The fallout from this collapse extended far beyond financial losses. Do Kwon became a central figure in an international manhunt as South Korean authorities issued an arrest warrant for him on charges of violating capital markets law. Interpol soon followed with a Red Notice, and Kwon reportedly evaded capture by moving between countries like Singapore and Serbia.

In March 2023, Kwon was arrested in Montenegro while attempting to travel with forged documents. This arrest marked the beginning of a series of legal battles. In Montenegro, Kwon faced charges for document forgery, resulting in a four-month prison sentence upheld by the country's highest court. Meanwhile, both South Korea and the United States sought his extradition to face charges, including securities fraud and wire fraud, stemming from the Terraform collapse.

By December 2024, Montenegro's Constitutional Court had rejected Kwon's latest appeal against extradition, leaving the decision in the hands of the country's justice minister.

With mounting evidence and international scrutiny, the case of Do Kwon and Terraform Labs has become a cautionary tale about the risks of innovation without sufficient safeguards and accountability in the cryptocurrency space.