Court releases Terra founder and CFO on €400K bail
On Friday, a court in Montenegro granted bail to Terraform Labs founder Do Kwon, who is facing charges of multibillion-dollar fraud in the U.S.
The South Korean cryptocurrency entrepreneur has been released on a €400,000 ($436,000) bail while awaiting trial for local charges, a court notice shows. Han Chang-joon, Terra’s former finance officer, will be also released from custody in Montenegro on the same conditions.
As part of their bail terms, both Do Kwon and Chang-joon will remain under surveillance and restricted from leaving their house. On Thursday, the two men faced their initial court hearing since being apprehended in March at the Podgorica airport for attempting to quit the country with forged travel documents.
Initially, the state prosecutor had sought to deny the bail request, citing that Kwon and Han possess adequate financial resources but has no interest in staying in Montenegro.
“The defendants explained their financial circumstances to the court, indicating that they have property worth several million, while the said amount would be paid by their wives,” reads the court statement. “They also promised that if bail is set, they will not hide until the end of the criminal proceedings, that they will regularly respond to court summons, and that they will be available at the address provided by their defense attorney.”
Both US and South Korean officials are seeking to extradite Terraform Labs CEO Do Kwon. Prosecutors in New York charged the 31-year-old entrepreneur with eight criminal indictments for defrauding American investors who purchased Terra USD and Luna.
Earlier in February, the Securities and Exchange Commission accused Do Kwon with fraud, alleging that he orchestrated a multibillion-dollar crypto asset securities fraud. The SEC alleges that Kwon marketed the so-called “algorithmic stablecoin” TerraUSD and a series of inter-connected digital assets as profit-bearing securities, claiming that the tokens would increase in value.
A South Korean court also issued arrest warrants for Kwon and five other people for their alleged role in $40 billion collapse of TerraUSD and LUNA, which devastated retail investors around the world. Kwon, who had been on the run since May 2022, denies any wrongdoing as he alleges that capital-markets law doesn’t apply to crypto assets.
LUNA tanked to virtually zero in a couple of hours after having peaked close to $120 with a market cap of more than $18.5 billion. Additionally, its sister stablecoin TerraUSD, or UST, lost its dollar peg before the collapse.
Globally, investors in TerraUSD and Luna lost an estimated $42 billion. Worse still, the meltdown has shaken confidence in the broader cryptocurrency industry and led to the failure of several major crypto companies including crypto lender Celsius and crypto fund manager Three Arrows Capital.
