Terraform Labs Founder Do Kwon to Be Released on $440K Bail (Report)

Do Kwon, founder of Terraform Labs, which operated Terra stablecoin and Luna cryptocurrency, has pleaded not guilty to traveling to Montenegro on a forged passport.

In the Basic Court of Montenegro’s capital Podgorica, Kwon and Terraform’s chief financial officer Han Chang-Joon denied document forgery charges.

Shortly after, another local report informed that the Court approved the bail worth €400,000 that was proposed by Kwon. As such, he is set to be released ahead of the trial.

The prosecutors objected to the decision, arguing that Kwon and Chang-Joon had no interest in remaining in Montenegro until the court date.

Kwon Proposes €400K for Bail

Kwon and Han were arrested at the Podgorica airport on March 23, and the prosecutors filed the charges against them on April 2. On the May 11 hearing, their lawyers sought the defendants’ bail and proposed a combined amount of €400,000. They also asked the court to define the measures for the defendants to “leave the apartment” during the prohibition and its supervision.

“A trial was held before the Basic Court in Podgorica in the case against the defendants C.J.H. and K.D.H., who are accused of having committed the criminal offense of document forgery. At the main hearing, the defendants denied the commission of the criminal offense they were charged with and presented their defense,” Podgorica’s Basic Court, in a statement, said.

The defense lawyers further asked the court to allow Kwon and Han to “report to the state authority periodically.” However, the state prosecutors opposed these proposals. The court has not decided on the matter and set June 16 as the next hearing date.

No Immediate Extradition

After his arrest, the US and South Korea officially asked Montenegro for Kwon’s extradition, the country’s Justice Minister Marko Kovac told a press conference in Podgorica on March 23. He further said Kwon and Han had been charged with traveling to the country on forged documents, and they would be deported only after the trial was completed and they had served the sentence that the courts might give against them.

Both countries also requested the Montenegro authorities to hand over the computers of the two arrested Terraform executives.

Terraform Lab’s Terra and Luna coins, which were pegged to each other in an algorithmic arrangement, collapsed in early May 2022 and left the crypto market with a loss of nearly $40 billion.

The South Korean courts clubbed the complaints from investors in these coins who lost their money in two cases and pursued to bring Kwon and his associates to justice. Kwon has denied any wrongdoing, except that his business strategies failed, leading to the collapse of the Terra-Luna ecosystem. However, he refused to answer the summons and has been evading arrest by the South Korean authorities.