Do Kwon, the co-founder of Terraform Labs, has entered a plea of not guilty in a Montenegrin court. He faces charges of using a counterfeit passport, an allegation made more complex by Kwon’s high-profile status in the cryptocurrency industry and the recent collapse of his TerraUSD stablecoin.
Do Kwon Denies Charges Amid a Sea of Controversy
Kwon, along with Terraform Lab’s former CFO Han Chang-joon, was apprehended in March at the Podgorica airport in Montenegro. The arrest took place when the pair attempted to board a private jet bound for Dubai. This arrest marked the end of their status as international fugitives following the TerraUSD stablecoin debacle, which had wiped out almost $45 billion from the cryptocurrency market and caused a cascade of business closures and bankruptcies.
Their defense attorney, Branko Andjelic, proposed a bail amount of 400,000 euros ($437,240) each, suggesting that they could be held under house arrest. However, Prosecutor Haris Sabotic strongly opposed the proposal, indicating that the two men have ample financial resources but no intention of remaining in Montenegro.
Additionally, Kwon and Han were found carrying passports from Belgium and Costa Rica, along with their South Korean passports. According to Interpol and Montenegro, the Belgian and Costa Rican passports were falsified, a claim that both men refuted in court.
The Ongoing Saga of Kwon’s Legal Troubles
Kwon’s legal predicaments extend beyond Montenegro’s borders. He has been charged by US prosecutors with orchestrating a multi-year cryptocurrency fraud, resulting in the loss of at least $40 billion in market value. South Korean prosecutors have made similar accusations.
Both the United States and South Korea are seeking Kwon’s extradition, but Montenegrin justice officials have stated that such considerations will only be made after the completion of local criminal proceedings.
The next hearing is scheduled for June 16. If convicted of using counterfeit documents, Kwon could face up to five years in prison under Montenegrin law.
Kwon has remained defiant throughout the proceedings, asserting that if bail is granted, he will not go into hiding and will fully cooperate with the court’s requests. Despite the looming legal challenges, Kwon is maintaining a resolute front. With volatile and liquid assets at his disposal, he has the resources to mount a formidable defense.
Before the downfall of TerraUSD, participants in the project had reportedly gained a profit of 463 billion won ($350 million), as confirmed by South Korean authorities in the previous month. Daniel Shin, the co-founder of Terraform Labs alongside nine other individuals, was charged in April with offenses such as breaching capital markets law.
South Korean law enforcement has seized approximately 233 billion won worth of assets belonging to Kwon, which includes his Seoul residence and a high-end imported vehicle, in addition to securities, banking deposits, and digital currencies, as stated in a report by Korean Economic Daily on Thursday.