The court’s ruling, finalized unanimously, has removed a key legal barrier, paving the way for a final decision by the country’s Justice Minister, Bojan Božović.

Kwon’s legal team had argued that a prior Supreme Court decision, granting the justice minister authority over his extradition, violated procedural fairness and his right to a fair trial. However, Montenegro’s highest court found no substance in these arguments, thereby demolishing his final line of defense.

Source: X

The stakes are high. Both the United States and South Korea are pushing for Kwon’s extradition to face financial charges related to the infamous $40 billion Terra ecosystem collapse in 2022, which was one of the greatest crypto scams in history. According to reports, the United States may be the most likely destination, which matches the preferences of Montenegro’s justice ministry.

A Global Ripple Effect

Kwon’s arrest in March 2023 at Montenegro’s Podgorica Airport for traveling with a forged passport sparked international headlines. His case has since become a global litmus test for how nations handle cross-border cryptocurrency crimes.

Key Transactions That Sparked Terra’s Stablecoin Meltdown on May 7, 2022. Source: Chainalysis

The Terra collapse was no ordinary financial debacle. When TerraUSD (UST) and Luna unraveled, they wiped out billions of dollars, shook investor confidence, and accelerated the “crypto winter” of 2022. The aftermath exposed systemic flaws in major platforms like FTX and Celsius, spurring global regulatory crackdowns on stablecoins and decentralized finance (DeFi).

Record-Setting Penalties

In a separate chapter of his legal woes, Kwon and Terraform Labs settled with the U.S. Securities and Exchange Commission (SEC) in June 2024, agreeing to pay a staggering $4.47 billion—the largest settlement in SEC history. This included billions in disgorgement fines, civil penalties, and interest.

Police escort crypto mogul Do Kwon through Podgorica, Montenegro. Source: X

Kwon himself was ordered to pay over $200 million in fines, while Terraform Labs, now under Chapter 11 bankruptcy protection, faces mounting uncertainty over its ability to meet these financial obligations.

Adding to the drama are allegations of Kwon’s political ties in Montenegro. Reports suggest he supported the Europe Now party, led by Prime Minister Milojko Spajic, raising eyebrows about whether political influence could play a role in the extradition decision.

What Lies Ahead

With his appeal dismissed, Kwon’s fate now rests solely in Justice Minister Božović’s hands. The ruling will most certainly reflect geopolitical realities, as the United States and South Korea continue to fight seeking his extradition.

Regardless of where Kwon finds himself, his case is a stark reminder of the critical necessity for international cooperation in combating crypto-based crimes. It also emphasizes the far-reaching effects of the Terra collapse, which continues to drive the worldwide debate over crypto laws and responsibility.