Terraform Labs co-founder Do Kwon is preparing to break free from a prison cell in Montenegro, though it’s a different kind of incarceration. A recent decision by the Supreme Court of Montenegro dealt a blow to the ongoing extradition saga, sentencing Kwon to house arrest rather than sending him to South Korea where he will face charges related to the spectacular 2022 collapse of the Terra USD (USTC) stablecoin . Here are the details…
Terra founder will be under house arrest
This decision came after the Supreme Court found significant procedural errors in the handling of Kwon’s extradition case. According to the decision, lower courts bypassed proper protocol by using an “abbreviated procedure” even though two separate extradition requests were on the table. The court argued that this violated the authority of the Montenegrin Minister of Justice. As a result, the extradition process was halted, allowing for a more thorough legal review to ensure all legal processes were followed.
Although Kwon will replace his prison cell with a house arrest arrangement, his freedom comes with some limitations. Montenegrin authorities confiscated his travel documents, effectively banning him from leaving the country. This serves the dual purpose of ensuring his presence in ongoing legal proceedings while acknowledging the seriousness of the charges against him.
Some altcoins rose due to the news
News of Kwon’s house arrest caused a small increase in the prices of Terra-related cryptocurrencies. Terra Classic (LUNC), TerraUSD (USTC) and Terra (LUNA) experienced a brief rally following a report by Vijesti, a Montenegrin newspaper, that initially broke the story. The rise ended after a few hours. This reaction likely reflects some investors’ hope that Kwon’s situation might get smoother.
But the shadow of the 2022 Terra ecosystem collapse still looms large. cryptokoin.com As we reported, the incident, which wiped out an estimated $40 billion from the market, left many investors outraged. A significant portion of the crypto community sees Kwon as the perpetrator of a massive Ponzi scheme. They claim that Kwon minted billions of additional LUNA tokens in a desperate attempt to maintain USTC’s $1 peg, ultimately causing the altcoin’s value to drop to near zero.
The legal drama surrounding Do Kwon is not over yet. South Korea and the USA requested extradition to Montenegro. While Kwon’s lawyers reportedly preferred extradition to South Korea due to lighter sentences, Montenegrin authorities have not yet made a final decision. This complex legal battle, with its international ramifications, will continue in the coming months and will keep the crypto world on edge.
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