Terra founder granted bail as prosecution appeal dismissed
Terraform Labs CEO Do Kwon’s request to stay out of jail in Montenegro until his trial for allegedly using a forged passport was granted following the dismissal of an appeal by prosecutors.
Earlier in May, a court in Montenegro granted bail to Do Kwon, who is facing charges of multibillion-dollar fraud in the US. Two weeks later, the country’s high court overrode the decision that would release the detained Terra Labs founder.
Nevertheless, the Montenegrin court ruled on June 2 that the appeal made by the State Prosecutor’s Office against the earlier bail agreement would not be upheld. As a result, both Do Kwon and Terraform Labs’ chief financial officer Han Chang-Joon will be able to await further legal proceedings while under house arrest in Montenegro.
The South Korean cryptocurrency entrepreneur will be released on a €400,000 ($436,000) bail while awaiting trial for local charges. 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. The two men already 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.
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.
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.