In a surprising twist, South Korean crypto refugee Do Kwon has been released from prison in Montenegro as the Supreme Court considers extradition requests from both the United States and South Korea. Kwon, co-founder of Terraform Labs, was released on Saturday, March 23, following a report from Bloomberg.

The decision follows a Supreme Court pause in the extradition process to South Korea and the suspension of a lower court ruling.

Penalty for traveling with false documents has expired

Do Kwon is at the center of fraud allegations in the wake of the cryptocurrency Terra’s collapse, which caused a market loss of about $60 billion by 2022. Darko Vukcevic, the prison director, has stated that Kwon has been released because his sentence for traveling with false documents has expired. As a foreign citizen whose documents were seized, he was handed over to the Police Directorate for Foreigners for further questioning.

The release was prompted by a review by the Supreme Court Council, which must decide on extradition to South Korea, where punishments would be milder compared to the United States. In the US, charges are being prepared against Kwon in connection with the collapse of TerraUSD, a $40 billion algorithmic stablecoin.

Passport is still withheld so he cannot leave the country

His lawyer, Goran Rodic, confirmed the release, stressing that Kwon’s passport had been withheld to prevent him from leaving the country. Later that day, Kwon was transferred to a reception center for foreigners, with plans by his lawyer to appeal the decision to keep him there until an extradition ruling is made.

The Supreme Court’s action came after a challenge from the chief prosecutor, who alleged procedural errors against the rulings in favor of South Korea. The final decision on extradition to either country is still pending, with no set timeline.

Should Kwon be extradited to the United States, he will likely face 8 felony charges filed in March 2023. He was arrested in Montenegro in March 2023 for using forged travel documents. Both U.S. and South Korean authorities have filed extradition requests to try Kwon for fraud in their respective countries, but a final decision has yet to be made.


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