Another chapter was published this week in the long and bizarre saga of Terraform Labs’ Do Kwon. The disgraced crypto founder will spend four months in a jail in Montenegro for falsifying official documents.
A Basic Court in Podgorica, the capital of Montenegro, this week sentenced Kwon and the former chief executive officer of Terraform Labs, Chang-joon Han, to four months in prison for forging travel documents.
The sentences include the time the two men have already spent in detention, 85 days, after being arrested at Podgorica Airport in March while trying to fly to Dubai, according to the court statement. The two men will be able to appeal the verdict within eight days of receiving the court’s written copy of the ruling.
Kwon and Han pleaded not guilty at their first court hearing in May to charges of passport and travel document forgery. At the time, authorities confiscated falsified documents that included two Costa Rican passports, two Belgian passports and two identity cards.
A high court in Montenegro overrode a lower court’s previous decision that would have released Kwon and Han on bail. But, a week later, the Montenegrin upper court again agreed to grant bail at €400,000 ($437,000) for each and proposed house arrest under police supervision.
The next step for Kwon is still unclear since both the U.S. and South Korea have been seeking to extradite him over charges in both countries relating to the collapse of Terraform Labs.
In February, the U.S. Securities and Exchange Commission (SEC) charged Kwon and Terraform with defrauding U.S. investors who purchased Terra USD and Luna tokens.
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” said SEC Chair Gary Gensler. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
“Investigating the case in South Korea would be the most efficient way of bringing justice,” as most key accomplices and evidence linked to the Terraform incidents are based in South Korea, Dan Sunghan, Korean prosecutor, told WSJ last month.
The U.S. and South Korea do not have extradition treaties with Montenegro.
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