Terraform CEO, Do Kwon, is set to be released on bail in Montenegro after the Basic Court in Podgorica agreed to a €400,000 ($436,000) bail. The court also granted bail for Terraform’s former CFO, Chang-joon Han, under the same conditions. Both individuals will be placed under house arrest.
The collapse of the Terra ecosystem in May 2022 significantly impacted the crypto industry, leading to a prolonged crypto winter and the bankruptcy of established players like Three Arrows Capital (3AC), a crypto hedge fund. This event was one of the key factors contributing to the decline in Bitcoin and other major cryptocurrency prices.
Initially, the state prosecutor opposed the bail request, stating that Kwon and Han possessed sufficient financial means but showed no interest in remaining in Montenegro. However, the court considered their explanation, which highlighted their substantial assets and the commitment of their wives to provide the required bail amount. Kwon and Han assured the court that they would not evade the criminal proceedings, would promptly respond to court summons, and would be available at the provided address by their defense attorney.
Do Kwon’s court appearance on Thursday resulted in a not guilty plea regarding the allegations of passport and travel document forgery. Kwon and Han were arrested at Podgorica airport in March while attempting to travel to Dubai. They were found in possession of fake passports from Belgium and Costa Rica, as well as a legitimate South Korean passport, according to Bloomberg.
In addition to the legal proceedings in Montenegro, Do Kwon is facing legal issues in South Korea and the United States. A South Korean court issued an arrest warrant for him in September last year, accusing him of violating capital markets laws. The U.S. Securities and Exchange Commission (SEC) filed civil charges against Kwon in February this year, alleging that he failed to provide accurate and complete disclosures required for various crypto asset securities.
Extradition requests from both South Korea and the United States will depend on the outcome of the passport fraud case in Montenegro. It is important to note that using fraudulent documents in Montenegro is a severe offense, punishable by up to five years in prison.
In summary, Terraform CEO Do Kwon has been granted bail in Montenegro, allowing his release from custody. However, he and former CFO Chang-joon Han will be placed under house arrest. The collapse of the Terra ecosystem played a significant role in the crypto industry’s downturn. Kwon is also facing legal challenges in South Korea and the U.S. related to alleged violations of capital markets laws and inadequate disclosure. The outcome of the passport fraud case will determine whether extradition requests from other countries will be pursued.