The Montenegrin government has disclosed that Justice Minister Andrej Milovic engaged in discussions with officials from the U.S. Securities and Exchange Commission (SEC) regarding the investigation involving Do Kwon, the co-founder of Terraform Labs.
According to a notification issued on May 22, the Montenegrin government revealed that Milovic held talks with SEC personnel, including Director of Enforcement Gurbir Grewal. The discussions centered around the SEC's case against Kwon, who, along with Terraform, was convicted of fraud in April, as per government sources.
As of the present moment, Kwon finds himself in Montenegro, where extradition requests from both the United States and South Korea are under consideration by local courts. Kwon was apprehended in March 2023 for utilizing falsified travel documents and subsequently received a four-month prison sentence.
Despite his ability to move freely within Montenegro upon release, Kwon's legal team has initiated numerous appeals, leading to delays in the extradition proceedings. The ultimate decision on whether to extradite the Terraform co-founder to either the United States or South Korea may rest with Milovic, depending on the court's verdict.
In the United States, a jury has already found Terraform and Kwon culpable for the fraud charges, and a hearing scheduled for May 29 will determine the appropriate remedies. The SEC has proposed that Kwon, along with his co-founders and Terraform, be held accountable for approximately $5.3 billion in disgorgement, prejudgment interest, and civil penalties.
Terraform faced a significant setback in 2022 when its algorithmic stablecoin, TerraUSD (UST), experienced instability, leading to the collapse of the company. Subsequently, in January, Terraform filed for bankruptcy in the United States, revealing estimated liabilities and assets amounting to as much as $500 million.
