A Montenegro appeals court said Tuesday it had overturned a ruling which ordered Terraform Labs founder Do Kwon to be extradited to the United States. The court has ordered a new proceedings over the fraud charges.

The cryptocurrency mogul was arrested nearly a year ago in Montenegro on an international arrest warrant in connection with a $40 billion (€37,1 billion) crash of Terraform Labs' cryptocurrency. The crash devastated retail investors both around the world and in his native South Korea. The US has demanded Kwon's extradition.

US and South Korea file rival extradition requests

Last month, the High Court in Montenegro decided to extradite Kwon to the US. But on Tuesday an appeals court quashed that ruling and ordered the lower court to repeat the process. The decision to reverse the ruling came due to procedural issues and questions over who filed the request first — the US or South Korea.

In a statement, the appeals tribunal said it had "accepted the appeal of Kwon Do-hyung's defense attorneys, annulled the decision of the Podgorica High Court of February 20, and returned the case to the first instance tribunal."

The tribunal said the High Court had committed "significant violations of the criminal proceedings provisions."

The High Court had previously greenlighted Kwon's extradition to the US but denied South Korea's request of the same nature.

Montenegro deported Kwon's business partner to South Korea last month. 

jsi/dj (AP, AFP)