Terraform Labs co-founder, Do Kwon, is set to be released from custody in Montenegro after the Basic Court in Podgorica agreed to a €400,000 ($436,000) bail, according to official communications. The same conditions apply to Terraform’s former CFO, Chang-joon Han, with both men now placed under house arrest.
The collapse of the Terra ecosystem in May 2022 played a significant role in the crypto industry’s descent into a prolonged crypto winter. This downtrend saw the prices of Bitcoin and other top cryptocurrencies plunge alongside several well-established players going bankrupt, such as the crypto hedge fund Three Arrows Capital (3AC).
Although the state prosecutor initially opposed the bail request, suggesting that Kwon and Han had the financial means but “zero interest” in remaining in Montenegro, the court eventually approved their request. The defendants outlined their financial circumstances, promising not to hide until the end of the criminal proceedings, regularly respond to court summons, and be accessible at the address provided by their defense attorney.
Kwon’s recent court appearance saw him enter a plea of not guilty regarding allegations of forging his passport and travel documents. Kwon and Han were arrested in March at Podgorica airport while trying to travel to Dubai, allegedly possessing fake passports from Belgium and Costa Rica. They also reportedly had a legitimate South Korean passport, which was their home country. During the court appearance, both men maintained that the Costa Rican passports they presented were genuine.
Apart from the ongoing legal proceedings in Montenegro, Kwon also faces legal issues in South Korea and the United States. A South Korean court issued an arrest warrant for Kwon in September last year, alleging that the Terraform CEO violated capital markets laws. Additionally, the U.S. Securities and Exchange Commission (SEC) filed civil charges against Kwon in February, accusing him of not providing accurate, complete, and truthful public disclosure as required for various crypto asset securities.
With both countries seeking Kwon’s extradition, the outcome will depend on the result of the case against him in Montenegro for passport fraud. Utilizing fraudulent documents in Montenegro is a severe offense that can lead to a prison sentence of up to five years.
The situation involving Terraform Labs’ co-founder highlights the importance of transparency and regulatory compliance in the crypto space. As regulators worldwide continue to scrutinize the industry, it is crucial for market participants to adhere to the rules and maintain the trust of their followers and the broader community.
Source: Decrypt
