Montenegro Supreme Court overturns original decision
Diplomatic evangelism between Korea and the US heats up behind closed doors
The repatriation of Dohyung Kwon, CEO of Terraform Labs, to Korea has once again fallen into mystery. This is because Montenegro's Supreme Court invalidated the lower court's decision to extradite him to Korea and sided with the local Ministry of Justice, which placed weight on extradition to the United States. While trials related to the Terra/Luna crash ‘without the main culprit (Kwon Do-hyung)’ have begun in both Korea and the United States, the ping-pong game between the Montenegrin court and prosecutors over the repatriation of Representative Kwon is recurring. Since extradition laws that are acceptable to all three countries have not been established, the behind-the-scenes diplomatic battle between South Korea and the United States to secure Representative Kwon is expected to heat up.
Local Supreme Court invalidates extradition to Korea
According to local media in Montenegro on the 5th (local time), the Montenegrin Supreme Court announced that it would nullify the decision to repatriate Representative Kwon to Korea and send the case back to the original trial. Accordingly, the case will be remanded to the Podgorica High Court and Representative Kwon's future will be decided again. Regarding this decision, the Supreme Court explained, “The court cannot make a decision on extradition of a criminal,” and “The Minister of Justice decides whether to extradite a criminal in accordance with the current law.”
As the decision to repatriate Representative Kwon returns to square one, the direction of the ROK-US judicial proceedings related to the Terra incident has become unclear. On the 25th of last month, the U.S. District Court for the Southern District of New York held a civil trial regarding the U.S. Securities and Exchange Commission (SEC) complaint against CEO Kwon. The U.S. court had postponed the trial date while waiting for Representative Kwon's repatriation, but ultimately proceeded with the trial with Mr. Kwon in absentia. The SEC determined that CEO Kwon and Terraform Labs deceived investors about the value of Terra by secretly entering into a large purchase agreement. Representative Kwon’s side protested that he had never described to investors that ‘virtual currency is not risky.’
In Korea, a trial has been held against Terraform Labs co-founder Shin Hyun-seong and former CEO of Chai Corporation since April of last year. Last month, Korean prosecutors reported that Kwon's repatriation was certain and planned to send investigators to Montenegro to secure new recruits during his entry into the country.
On the 7th of last month, the Podgorica High Court in Montenegro decided to extradite Mr. Kwon to Korea, and the Court of Appeals confirmed this decision on the 20th. However, the Montenegrin Supreme Prosecutor's Office put the brakes on the decision to extradite him to Korea, requesting a ruling from the Supreme Court on the legality of the procedural issues of the Court of Appeal and the High Court.
A legal expert with experience in extradition of criminals said, “When several countries compete to extradite criminals, the country that has established laws or precedents on what to give priority to, such as ‘where the scale of damage is greater,’ ‘nationality of the criminal,’ and ‘time to request extradition,’ “There are almost none,” he explained, adding, “The local Supreme Court would have had no choice but to consider national interests.”
“Intense behind-the-scenes diplomatic battle for repatriation”
Korean and American judicial authorities are paying close attention to the decision to repatriate Representative Kwon. A similar diplomatic battle took place in 2019 when Jeong Han-geun, the fourth son of the late Hanbo Group Chairman Jeong Tae-soo, was repatriated to Korea. The prosecution discovered that Mr. Jeong, who had embezzled 32.2 billion won in company funds and had been on the run abroad for 21 years, was in Ecuador and requested extradition to Ecuador. While the trial was in progress, two prosecutors from the prosecution went to Ecuador and visited the Ministry of Foreign Affairs, the Ministry of the Interior (police), the Supreme Prosecutor's Office, and the Supreme Court. He also met directly with the Chief Justice of the Supreme Court and the Prosecutor General to request cooperation in repatriation.
However, unlike Chairman Chung, whose repatriation operation continued in secret, the repatriation of Representative Kwon has been made public both internally and externally. There remains a possibility that Mr. Kwon, who wants to ‘go to Korea’, will seek a way out through lawyers in Montenegro and Korea. Kwon's Korean lawyer says he is in contact with local officials to seek repatriation to Korea.
The US is ‘strongly punishing’ and Korea is ‘securing investigative power’
The decision to which country Representative Kwon will be repatriated in the future is expected to affect not only the person involved, Representative Kwon, but also the judicial procedures in each country. In addition to the civil suit that recently began in the United States, CEO Kwon is also being charged with eight counts, including product fraud, financial fraud, market manipulation, and securities fraud. If these sentences are added together, he could be sentenced to more than 100 years in prison. It can be interpreted that public opinion and the legal community are taking the illegality of this incident more seriously than in Korea, where the maximum sentence for economic offenses is about 40 years.
On the other hand, in Korea, the impact on the prosecution's investigation is receiving more attention. Once Representative Kwon is secured, the behind-the-scenes investigation related to the Terra/Luna crash can be resumed. At the time of the Terra/Luna crash, suspicions were raised in some quarters that Terraform Labs had been lobbying for legislation in the political world.