South Korean cryptocurrency entrepreneur co-founder of Terraform Labs (Terra Luna), Do Kwon (C) is taken to court after being arrested at the airport on March 24, 2023 in Podgorica. Image Credit: AFP

Pogorica, Montenegro: A Montenegrin court on Thursday ruled that cryptocurrency mogul Do Kwon should be handed over to his native South Korea, the latest twist in the months-long legal procedure that followed the arrest of the Terraform Labs founder in the Balkan nation last year.

The High Court handed down the ruling just days after an appeals court overturned its previous decision to extradite Kwon to the United States.

Kwon, 32, was apprehended on an international arrest warrant in connection with a $40 billion crash of Terraform Labs’ cryptocurrency, which devastated retail investors around the world. Both South Korea and the U.S. have requested Kwon’s extradition from Montenegro.

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Last month, the High Court in Montenegro decided to hand over Kwon to the U.S. But the Court of Appeals annulled the decision and ordered the lower court to repeat the process. In a statement, the Appeals Court cited procedural issues over who was the first to file a request, the U.S. or South Korea.

The latest decision by the High Court can be appealed again, said a spokeswoman Marija Raković. It remains unclear when the final ruling will be made. Kwon is also serving a four-month prison sentence in Montenegro for using a false passport.

Kwon, known as “the cryptocurrency king,” is wanted by the U.S., where he was charged with fraud by federal prosecutors in New York. South Korean prosecutors have also sought his extradition.

Kwon and another South Korean were arrested at Montenegro’s Podgorica Airport on March 23, while trying to depart for Dubai, United Arab Emirates, using fake Costa Rican passports. Kwon and five others connected to Terraform were wanted because of allegations of fraud and financial crimes in relation to the implosion of its digital currencies in May 2022.

TerraUSD was designed as a “stablecoin,” a currency which is pegged to stable assets like the dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg.