In a surprising turn of events, Terraform Labs founder Do Kwon is back in custody after a Montenegrin high court annulled a lower court’s decision to allow Kwon to be released on bail.

Do Kwon’s $436K Bail Scrapped

Do Kwon and former chief financial officer Han Chong-joon are back in jail, per a Bloomberg report.

This comes after the high court of Montenegro in Podgorica nullified a decision from two weeks ago to release Kwon and Han to house arrest on 400,000 euros ($436,000) bail each.

After the Basic Court in Montenegro granted the pair bail, prosecutors in the case swiftly appealed the decision. Court spokeswoman Marija Rakovic told Bloomberg that the matter will now head back to the lower court, which must make a decision taking into consideration what the higher court decided.

Kwon and Han were charged with using a fake passport in Montenegro after attempting to travel to Dubai from Podgorica in March with fake Belgian and Costa Rican passports. The two defendants maintain that the passports were issued legally.

TerraUSD, the algorithmic stablecoin designed by Terraform Labs, imploded last spring along with governance token Terra (LUNA), erasing over $40 billion in investors’ wealth and triggering a snowball crisis in the crypto industry last year. Shortly after the catastrophic Terra ecosystem collapse, Three Arrows Capital, Voyager Digital, and Celsius all declared bankruptcy. 

Besides the forgery charges, Do Kwon is also facing criminal fraud charges in the U.S. and also back in his home state South Korea. S. Korea issued an arrest warrant against him last September, alleging that he violated capital market laws. As ZyCrypto previously covered, he faces up to 40 years in jail in South Korea, the country where he supposedly committed most of his crimes.

U.S. prosecutors in New York have charged Kwon with eight counts, including commodities fraud, securities fraud, wire fraud, and conspiracy to manipulate the market.

In the meantime, both the U.S. and South Korea have sought to extradite the Terraform Labs boss from Montenegrin authorities.

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Filed under: Bitcoin - @ May 24, 2023 9:24 pm