A Montenegro court has sentenced Do Kwon, the founder of cryptocurrency firm Terraform Labs, and another South Korean citizen to four months in prison for using counterfeit documents. Kwon’s arrest in March, on an international warrant, was in connection with the catastrophic crash of Terraform Labs’ cryptocurrency, which caused significant losses for retail investors worldwide. Both the United States and South Korea have requested his extradition, with the outcome pending in separate court proceedings.
The authorities apprehended Kwon and his accomplice at Podgorica Airport while they were attempting to travel to Dubai using fake Costa Rican passports. The Basic Court in Podgorica, the capital of Montenegro, announced on Monday that the time spent in detention since their arrest on March 23 will be counted towards their sentence, as reported by RTCG television.
Kwon’s lawyer in Podgorica, Goran Rodic, confirmed that the court found both individuals guilty of forging identification documents. Rodic mentioned that he is yet to discuss further steps and a possible appeal with his clients.
South Korea had requested Interpol to circulate a “red notice” in September, urging member nations to locate and apprehend Kwon.
In another development, an alleged ringleader involved in an $18 million COVID fraud scheme in LA has been extradited from Europe.
The two suspects had initially taken refuge in Serbia but relocated to Montenegro after South Korean investigators traced them and asked Serbian authorities to detain them, according to the South Korean Justice Ministry at the time of their arrest.
Kwon and five others associated with Terraform are wanted on suspicion of fraud and financial crimes related to the collapse of the firm’s digital currencies in May 2022.
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TerraUSD was intended as a stablecoin, a cryptocurrency pegged to stable assets like the U.S. dollar to avoid significant price fluctuations. However, the holders of TerraUSD and its floating sister currency, Luna, experienced a loss of approximately $40 billion in market value when the currencies plunged well below their $1 peg.
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