Former Terraform Labs Co-Founder Pleads Not Guilty to Passport Fraud Charges
Do Kwon pleads not guilty to passport fraud in Montenegro while facing more serious charges in the US and South Korea.
Fri, 12 May 2023, 12:57 pm UTC
Former co-founder of Terraform Labs, Do Kwon, has pleaded not guilty to charges of passport fraud in Montenegro. Kwon, who also faces more serious charges in South Korea and the United States, was apprehended along with former CFO Han Chang-Joon at the Podgorica airport in March after months on the run as fugitives.
The accused were found in possession of counterfeit passports from Belgium and Costa Rica, as well as a legitimate passport from South Korea. While Kwon maintains that the Costa Rican passports were genuine, Interpol and Montenegro have confirmed that the Belgian and Costa Rican passports are fraudulent.
During the court hearing in Montenegro on Thursday, the accused proposed a release on bail of $437,000 for each individual and requested house arrest at Do Kwon's girlfriend's residence. The prosecutor opposed this, citing the accused's significant financial resources and the likelihood of their fleeing Montenegro. Defense Attorney Branko Andjelic argued for bail, but the judge refrained from announcing a decision and scheduled the next hearing for June 16.
It is important to note that Kwon and Chang-Joon are facing serious charges in the United States and South Korea. Kwon is accused of concealing $100 million in a Swiss bank account. U.S. prosecutors have also charged him with orchestrating a large-scale cryptocurrency fraud that caused a market value loss of at least $40 billion over several years. In South Korea, he could face up to 40 years in prison. Both countries are actively seeking Kwon's extradition from Montenegro, but local authorities will only consider it after the ongoing proceedings.
It should be remembered that Terraform Labs experienced a significant collapse last year, resulting in a loss of nearly $45 billion in market capitalization within a week. The Terra blockchain was temporarily halted on May 13, with the issuance of the stablecoin TerraUSD (UST) and the sister token Luna serving as the primary backing asset, absorbing the volatility of TerraUSD. The crisis deepened when UST lost its peg to the US dollar on May 9.
Kwon's reputation has been tarnished as he is now known as one of the prominent figures in the cryptocurrency industry, alongside FTX's Sam Bankman-Fried. The impact of this latest development on the Terra blockchain and the future of Terraform Labs remains to be seen.
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