Terra founder Do Kwon will be held in Montenegro custody for six months as the court considers extradition requests from South Korea and the U.S.

The High Court of Montenegro ordered Do Kwon and his associate Han Chang-Joon into custody for six months, during which time the court will consider whether to extradite them to South Korea or the U.S, local media outlet RFE News reported on Thursday. 

The court’s decision comes after it approved Kwon and Han’s release on bail for €400,000 each. The decision to grant the pair bail is what triggered the extradition detention, and is part of a wider controversy that involves high-profile politicians in Montenegro.

Korean media reports that for years, Do Kwon had secretly been sponsoring a prominent Montenegrin politician using illegal funds. Two days ago, a Montenegro high court approved Do Kwon’s bail request again, allowing for his release from prison. https://t.co/aNqYkKG70H

— FatMan (@FatManTerra) June 9, 2023

According to South Korean media outlet Yonhap News, Kwon sponsored several politicians in the country using illegal funds. Kwon himself disclosed his ties to the Milojko Spajić, a member of the “Europe Now” political party, in a letter sent to Prime Minister Dritan Abazovic, Justice Minister Marko Kovac, and the Special Prosecutor’s Office just days before the general election.

Spajić, the leading candidate for prime minister, denied ties to Kwon and initially claimed to have alerted the country’s Interior Ministry to the Terra founder’s whereabouts, according to reporting from Balkan Insight earlier this month.

However, Spajić has since admitted that he had invested in Terraform Labs in 2018, but continues to deny allegations that he received political contributions from Kwon.

Interior Minister Filip Adžić said Spajić had not provided the ministry with any information about Kwon. Adžić’s investigation into ties between the two revealed that they had met in the Serbian capital Belgrade earlier this year. 

“The laptop confiscated from Kwon Do-hyung contains evidence of political funding support. I will not talk about the amount, but it is a level that cannot be ignored,” he said.

Meanwhile, Kwon’s attorneys are continuing to push for a dismissal of charges against the Terra founder in a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). In a Thursday hearing, Douglas Henkin, an attorney with the Dentons law firm representing Terraform Labs, argued that TerraUSD (UST) should not be characterized as an “investment contract” by nature.

“The SEC only wants one word to have any meaning. They want to delete the word ‘contract,’” said Henkin, in the hearing reported by CoinDesk.