The Terraform founder, whose real name is Kwon Do-hyung, had been on the run for months after fleeing first South Korea and then Singapore ahead of the company’s crash in 2022. He was arrested in Montenegro for using a fake passport in March last year.

Both Seoul and Washington are seeking Kwon’s extradition for his suspected role in fraud linked to his company’s dramatic collapse, which wiped out about US$40 billion of investors’ money and shook global crypto markets.

Montenegro’s appeals tribunal said in a statement that it had “accepted the appeal of the defendant Kwon Do-hyung defence attorneys, annulled the decision of the Podgorica High Court of Feb 20, and returned the case to the first instance tribunal”.

The tribunal explained its decision citing “significant violations of the criminal proceedings provisions” by the High Court.

The High Court on Feb 20 allowed Kwon’s extradition to the US but denied South Korea’s extradition request.

Montenegro deported Kwon’s business partner – identified by his initials only JCH – to South Korea in early February.