Do Kwon, the founder of the failed cryptocurrency project Terraform Labs, lost his appeal of a 4-month prison sentence in Montenegro related to passport fraud charges. Kwon and an associate, Han Chang-Joon, were convicted in June 2022 by a court in Podgorica, Montenegro of falsifying passport documents.
- Do Kwon, founder of Terraform Labs, lost his appeal of a 4-month prison sentence in Montenegro for falsifying passport documents.
- Kwon and an associate, Han Chang-Joon, were convicted and sentenced in June 2022 by a court in Montenegro.
- The prison sentence is related to passport fraud and not directly connected to the collapse of TerraUSD and the Terra blockchain in May 2022.
- Kwon faces separate criminal charges and lawsuits in South Korea and the United States related to Terra’s collapse.
- After completing his sentence in Montenegro, Kwon faces extradition to South Korea or the U.S. to face charges there.
The High Court in Podgorica rejected Kwon’s appeal and upheld the 4-month sentence. The court stated that the punishment was appropriate given the circumstances and that confiscating the falsified passports was necessary to prevent future criminal acts.
While the charges are specifically related to passport fraud, Kwon is also facing criminal prosecution in South Korea and the United States stemming from the dramatic collapse in May 2022 of TerraUSD, a so-called stablecoin tied algorithmically to the value of $1. The implosion of TerraUSD and its sister token Luna wiped out an estimated $40 billion in investor funds globally.
Authorities in South Korea have issued an arrest warrant for Kwon, accusing him of violating capital markets laws. In the US, both the Department of Justice and Securities and Exchange Commission have filed charges against Kwon and Terraform Labs, alleging criminal fraud and unregistered securities violations.
Kwon was arrested along with Chang-Joon in Montenegro back in March 2022. The two have remained in custody since then. It is expected that Kwon will be extradited to face charges in South Korea or the United States once his 4-month sentence in Montenegro is complete.
The Terra ecosystem has remained active under new leadership despite the criminal cases surrounding Kwon. However, the future remains highly uncertain for Terraform Labs as it contends with multiple lawsuits and the criminal prosecution of its founder. Kwon’s failed appeal in Montenegro appears to clear the way for him to stand trial elsewhere soon.