Do Kwon, the CEO and co-founder of the collapsed $40 billion Terra-Luna stablecoin scheme, along with Han Chang-joon, the scheme’s CFO, have been sentenced to four months in jail in Montenegro. The court found them guilty of forging official documents. Kwon and Han were arrested at Podgorica Airport in March as they attempted to board a flight to Dubai using counterfeit documents. Both pleaded not guilty.
Following their arrest, the Podgorica basic court ordered their 30-day pre-trial detention. Upon their apprehension, the police discovered altered Costa Rican passports and a separate set of Belgian passports in their luggage.
Although Montenegro lacks extradition treaties with the United States and South Korea, the Podgorica High Court ruled that Kwon would remain in “extradition custody” for six months while South Korea’s extradition request is under review.
The court’s statement clarified that the sentences would account for the time Kwon and Han have already spent in detention since their arrest in March. They will also have the opportunity to appeal the verdict within eight days after receiving written notification from the court.
In February, U.S. SEC charged Do Kwon and Terraform Labs, his company, with orchestrating a multi-billion dollar cryptocurrency securities fraud. Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), stated that Terraform and Kwon allegedly failed to provide the public with accurate and complete disclosure, particularly concerning Luna and TerraUSD.
Last year, a South Korean court issued arrest warrants for Kwon and five others connected to the case. Prosecutors believed that Terraform Labs, a Singapore-registered company, had violated capital market regulations.
The collapse of the Terra-Luna scheme in May 2022 had a significant impact on cryptocurrency markets and marked the beginning of the so-called crypto winter.
