Terraform Labs co-founder Do Kwon is set to be released from custody after a court in Montenegro approved a €400,000 ($436,000) bail, as per a report by local news outlet Pobjeda.
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Kwon was detained in Montenegro in March on the charge of attempting to exit the country using a counterfeit passport. Montenegro’s interior ministry asserts that Kwon and another South Korean national, Han Chang-joon, who served as Terraform’s ex-chief financial officer, sought to board a private flight to Dubai with deceptive Costa Rican travel documentation.
A similar bail amount has been accepted for Han, with the prosecution given a three-day period to challenge the decision.
Terraform Labs, the creator of the TerraUSD stablecoin often referred to by its ticker, UST, faced a significant downturn a year ago, leading to the evaporation of over $40 billion in investor funds. This event was one of the many that shook the crypto markets in 2022, which also saw the bankruptcy of crypto lender Celsius and exchange heavyweight FTX.
While Kwon also grapples with legal issues in Korea and the U.S. stemming from TerraUSD’s downfall, it’s important to note that he has yet to be convicted of any fraud-related charges.
A South Korean court issued an arrest warrant for Kwon last September, accusing him of violating capital market laws. Korean prosecutors reportedly made a trip to Serbia, which shares a border with Montenegro, in February in a bid to locate him.
In the U.S., the Securities and Exchange Commission (SEC) has brought civil charges against Kwon, accusing him of failing to provide “full, fair, and truthful disclosure” as required for a multitude of crypto asset securities.
However, it’s worth noting that whether cryptos, and particularly Terra’s Luna, fit the definition of a security is still a matter of ongoing debate. Also, while some view Kwon’s actions as fraudulent, others see his venture as an ambitious project that failed to deliver on its promises. The question of whether there was fraudulent intent or merely over-ambition on Kwon’s part is yet to be definitively settled.
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