On May 12, a Montenegro court granted approval to the proposed bail terms for Terra founder Do Kwon, who faces criminal charges of document forgery under Montenegrin law.
According to local authorities, the court accepted the bail offer of 400,000 euros ($436,000) each for Kwon and Han Chang-Joon, Terraform Labs’ chief financial officer, along with house arrest in place of custody.
A string of allegations and investigations
Do Kwon and Han Chang-Joon were arrested at Podgorica airport in March 2023 for allegedly using false documents. Their passports had been confiscated in South Korea, their home country, in October 2022.
Interpol has been seeking the Terraform Labs co-founder for his involvement in the Terra ecosystem’s $40 billion collapse in May 2022, which sent shockwaves through the crypto industry. The criminal trial in Montenegro is set to begin on June 16.
South Korean authorities have frozen $176 million of Kwon’s personal assets as part of the ongoing criminal proceedings. In a Montenegrin court, Do Kwon pleaded not guilty to charges of forging his passport and travel documents.
Kwon’s hearing occurred a month after he and Han Chang-Joon, who also pleaded not guilty, were arrested at Podgorica airport while attempting to travel to Dubai.
The fall of Terraform Labs
Terraform Labs launched its TerraUSD stablecoin and Luna in 2019 before relocating its headquarters to Singapore in 2020. However, in May 2022, the TerraUSD stablecoin lost its $1 peg, resulting in the loss of around $40 billion in market value and the collapse of numerous crypto firms.
A year after the crash, Kwon is under investigation in the U.S. and South Korea and faces potential imprisonment in Montenegro before being extradited to face charges in either the U.S. or South Korea. Montenegro’s Justice Ministry announced this possibility in March.
The past year has seen a series of events unfold for the now five-year-old company, including lawsuits, arrest warrants, and asset freezes. South Korean prosecutors have been particularly aggressive in their pursuit of Kwon, accusing him of avoiding capture and issuing a red notice for his arrest through Interpol.
Kwon has maintained that the charges against him are not legitimate and are politically motivated. Despite this claim, South Korea has continued to push for his extradition to face charges related to the collapse of Terraform Labs, as well as other allegations.
With the Montenegro court’s approval of Kwon’s bail terms, his fate now hangs in the balance as he awaits trial.
The upcoming trial, set for June 16, is anticipated to be closely monitored by the international crypto community, as the outcome could have far-reaching implications for the future of the industry.
As Do Kwon’s legal battles continue, the true extent of his involvement in the Terra ecosystem’s collapse remains to be seen, but the stakes are undoubtedly high for all parties involved.
