Do Kwon and Han Chang-Joon, the co-founder and CFO of Terra/LUNA, face an appeal from Montenegro prosecutors who want them in custody for allegedly using fake passports.
Do Kwon and Han Chang-Joon, the co-founder and chief financial officer of Terraform Labs, were arrested in Montenegro last month for allegedly using false passports from Belgium and Costa Rica.
Filing falsified documents may result in no less than five years in prison. Both have pleaded not guilty.
The court placed them under house arrest instead of taking them into custody. They must be available and respond to court summons regularly.
The State Prosecutor’s Office in Podgorica appealed the decision on Wednesday, arguing that Kwon and Han should stay in custody until the June 16 trial because the bail terms were too lenient.
The press release states, “The case was sent to the High Court in Podgorica for a decision on the appeal.” It added that the public would be informed of the outcome of the proceedings once available.
At the time of writing, the Podgorica court had not issued any pertinent announcements following the appeal.
The Background
Montenegro is not the only country levelling a gavel at Kwon, Han, and other executives at Terraform Labs. Courts in South Korea, Singapore, and the US are also after them.
The United States Securities and Exchange Commission (SEC) accused Kwon and others of knowingly trading unregistered securities. Prosecutors in South Korea intend to bring Kwon to trial on similar charges.
However, Terra’s legal team hit out at the SEC, claiming that its charges were baseless and that Terra stablecoins were “currencies,” indicating that the SEC had no jurisdiction over Terra.
Therefore, the attorneys filed a motion to dismiss the allegations.
Kwon and Han also face accusations of involvement in the collapse of Terra/LUNA last year, which wiped out over $40 billion from the crypto market and triggered a wider collapse in the crypto economy.
Terra/LUNA’s downfall illustrates a case study in crypto hype and who bears the consequences when it all crashes down.
Last week, reports said that Kwon “cashed out $2.8 million worth of crypto before his release on bail in Montenegro. Multiple sources said he withdrew nearly $500,000 worth of Tether (USDT) from a wallet many believed was his seven days prior.
Additionally, about 2.39 million Terra Luna Classic (LUNC) coins were withdrawn from a wallet associated with Kwon.
Podgorica court documents further showed that Kwon and Han claimed to own property in South Korea. Consequently, South Korean prosecutors consider all of Kwon’s funds to be the proceeds of crime.
However, they claimed they had failed to freeze the CEO’s crypto funds. Seoul still hopes to persuade Montenegrin authorities to deport Kwon to his home country to face fraud charges.
In late April, Seoul prosecutors indicted 10 people, including Terra co-founder Daniel Shin, on various charges including violations of capital markets law related to the failed Terra/LUNA project.
Shin’s lawyers, however, said that their client left Terraform Labs in 2020 and is, therefore, not involved in the massive 2022 Terra crash.
