Montenegro Justice Minister meets with US SEC; discusses Do Kwon case

Montenegro’s Justice Minister, Andrej Milović, recently met with representatives from the U.S. Securities and Exchange Commission (SEC) to discuss the ongoing investigation into Do Kwon, former leader of Terraform Labs. The discussions also covered broader issues related to protecting crypto investors, according to a statement from Montenegro’s Justice Ministry on Wednesday. 

SEC investigation and court proceedings

During the meeting, the SEC presented the findings of its investigation into Kwon and outlined the court process against him in the United States. While the specifics of the discussions regarding Kwon were not disclosed, the meeting could indicate progress in resolving Kwon’s extradition status, which has been at an impasse. The decision on whether Kwon will be extradited to the U.S. or his native South Korea has been pending for several months. 

“One of the topics of the meeting was the investigation conducted by the SEC in the case of Do Kwon. Minister Milović was informed about the results of that investigation, as well as the course of the court process against Do Kwon in the United States,” the statement reads. 

“Minister Milović expressed his gratitude to the representatives of the SEC for the detailed presentation and useful information and emphasised the importance of international cooperation in the field of investor protection and the fight against fraud on the financial markets,” it added. 

“Representatives of the SEC and the delegation of the Ministry of Justice of Montenegro concluded that this meeting represents a significant step towards strengthening relations between Montenegro and the United States of America in the field of justice and investor protection, and that in the future, for the mutual benefit of the two institutions, the relationship should be stronger,” the statement concluded. 

Extradition decision and legal rulings

In early April, Montenegro’s Supreme Court ruled that the decision on Kwon’s extradition should be made by the justice minister rather than the court. This ruling came after prosecutors in Montenegro opposed an earlier decision to extradite Kwon to South Korea, which was initially set for March. The Supreme Court’s ruling shifted the responsibility to Milović, prolonging the extradition process. 

Terraform Labs and Do Kwon were found liable for civil fraud by a U.S. jury in February 2023, following the collapse of the algorithmic stablecoin Terra USD (UST) a year earlier. The SEC had brought the case against Kwon, accusing him of misleading investors and engaging in fraudulent activities. 

Kwon’s arrest and status

Kwon was arrested in Montenegro in March last year for traveling with forged travel documents. After serving a prison term that ended on March 23, 2024, he was reportedly placed in a “reception center” for foreigners, with his passport confiscated by local authorities. This placement reflects the ongoing legal and diplomatic negotiations surrounding his extradition. 

Future implications

The recent discussions between Montenegro’s Justice Ministry and the SEC could signal a potential breakthrough in the extradition process. The outcome will have significant implications for Kwon, Terraform Labs, and the broader regulatory landscape for cryptocurrencies. As both the U.S. and South Korea vie for his extradition, the decision by Montenegro’s Justice Minister will be pivotal in determining where Kwon will face legal proceedings.