Do Kwon's detention in Montenegro could be extended for another six months (Report)

Do Kwon's detention in Montenegro could be extended for another six months (Report)

Montenegrin authorities are reportedly considering extending Do Kwon's detention in the country for another six months before making an official decision on his possible extradition. The Terraform Labs co-founder's home country - South Korea - and the world's largest economy - the United States of America - have both requested his deportation.

Montenegrin police arrested the 31-year-old developer in March this year after he was allegedly on the run for several months and changed several hiding places. He faces numerous fraud charges and is accused of being involved in last year's collapse of LUNA/UST.

Will Kwon's stay in Europe be extended?

Marija Rakovic – Public Relations Advisor of the Supreme Court of Montenegro –confirmedtold a local media outlet that Kwon had received a six-month prison sentence. During this period, judges will decide whether the former crypto tycoon will be extradited to South Korea.

The Asian country's authorities insisted on his deportation, claiming he was instrumental in itthe Terra crashLast year, this caused billions of dollars in losses and undermined the entire digital assets sector.

The US has also requested Kwon's extradition. The US Securities and Exchange Commission had previously alleged that Terraform Labs and its co-founder orchestrated a massive crypto fraud by offering and selling unregistered securities using digital currencies.

American prosecutorspressedKwon is also accused of being the main cause of the disaster. The officials accused him of securities fraud, commodities fraud and conspiracy and demanded appropriate punishment.

The legal problems for the South Korean do not stop there. When he was arrested at Podgorica airport in March, he was carrying a fake passport and travel documents. A hearing on the matter in the Podgorica Basic Court is scheduled for June 16.

In addition, Kwon must answer questions about his possible connection to Milojko Spajic – the former finance minister of Montenegro and current leader of the Europe Now political party. The National Security Council said the individuals had been friends for years and that Kwon financed some of Spajic's political campaigns.

Could the US Securities and Exchange Commission drop the fees?

The Dentons law firm, which represents Terraform Labs, recently tried to alleviate some of Kwon's problems by ending its legal battle with the U.S. Securities and Exchange Commission. The lawyers filed an applicationclaimthat UST (the algorithmic stablecoin developed by the blockchain firm) is not a security, meaning the regulator should dismiss the charges.

The defense, represented by Douglas Henkin, claimed the asset was intended for “practical purposes and trading, not as an investment.”

"By design... it's pegged one-to-one to the dollar; it's designed not to fluctuate. That's for commerce... that's a consumptive use."

The lawyer went further, comparing the stablecoin to Bitcoin and suggesting that UST is “controlled by a decentralized group via the LUNA token.”

Devon Staren - an SEC representative - said the agency was "simply enforcing existing laws." She noted that analysis of tokens goes beyond them and touches on the ecosystems to which they belong. Staren also praised LUNA, claiming it was “just a piece of code.”

Judge Rakoff's decision on whether to grant or deny the motion is expected in mid-July.

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