Terraform Labs' Do Kwon Goes From Prison To Shelter, Lawyer Decries 'Illegal' Transfer

Crypto fugitive Do Kwon, the founder of collapsed blockchain protocol and payment platform Terraform Labs, was freed from prison in Montenegro over the weekend, according to a new report.

Kwon Do Hyung (Hyeong), widely known as Do Kwon, was released from prison early Saturday "as his regular prison term for traveling with fake papers ended," Bloomberg first reported Sunday, citing Montenegrin prison director Darko Vukcevic. The outlet noted that his next destination was unclear.

However, local Vijesti News reported later in the day that Kwon was taken by police officers to the "Reception Center for foreigners" after a five-hour interrogation by the foreigners' inspector. The outlet noted that Kwon's lawyer, Goran Rodic, deemed the police's transfer of his client from prison to a foreigners' shelter as illegal.

"From nine to two in the afternoon, there was an illegal treatment in the Police Department against our client, who according to the court's decision, was supposed to wait for the extradition procedure and defend himself from freedom after serving his prison sentence today," Rodic reportedly said Saturday.

The High Court had ordered Kwon's travel documents to be confiscated so he wouldn't be able to leave Montenegro pending the decision on his extradition either to the United States or South Korea. The former crypto magnate, who faces multiple fraud-related charges in the United States and his home country, is expected to stay in the shelter until a final decision is made on his extradition.

The news of Kwon's transfer by police to a center for foreign nationals came about two days after Montenegro's Office of the Supreme State Prosecutor said that the High Court's earlier decision of allowing the Terraform Labs founder to be extradited to South Korea was an authority overreach.

Montenegro's top prosecutor said the High Court conducted "abbreviated" proceedings, instead of regular proceedings, to make a decision. It also blasted the court for not accommodating the state prosecutor in the appeal procedure, which the latter said was a violation of "the provisions of the criminal procedure, and which had an impact on the adoption of a legal court decision."

The High Court previously determined that South Korea's extradition request came earlier than Washington's – a decision that the Appellate Court of Montenegro confirmed a day before the state prosecutor challenged it.

Kwon's legal counsel previously attempted to block his South Korea extradition as the disgraced businessman, who was arrested in Montenegro earlier last year for faking his travel documents, is facing multiple fraud-related charges over the dramatic collapse of Terraform Labs that wiped out some $40 billion in investor funds.