Less than two weeks after being released on bail and placed under house arrest, Bloomberg reports that Kwon is back in custody.
Bail revoked in Montenegro
Do Kwon, co-founder of Terraform Labs, is facing bail revocation in Montenegro, as reported by Bloomberg. The Supreme Court of Montenegro’s ruling marked a reversed decision from two weeks ago in which both Kwon and Terraform’s former CFO, Han Chong-joon, were released on bail of €400,000 each.
In an earlier ruling, the court had ordered the two men to be placed under house arrest in Montenegro pending trial. However, according to a Bloomberg report, Kwon will remain in detention following the recent Supreme Court decision. The decision, which took effect Wednesday, also applies to Chong-joon, as confirmed by a court spokesman speaking to Bloomberg.
After the lower court’s initial decision to release Kwon and Chong-joon on bail, the prosecution appealed against this ruling. According to Marija Rakovic, spokeswoman for the court, this has resulted in the case now going back to the lower court, she told Bloomberg.
Do Kwon and Chong-joon accused of forgery passports
Do Kwon and Chong-joon are facing charges of falsifying official documents. They came to the attention of authorities in March when they attempted to travel from Podgorica to Dubai on allegedly forged Belgian and Costa Rican passports. In court, both gentlemen have so far defended the authenticity of the passports.
Aside from counterfeiting charges, Kwon also faces criminal charges in both the United States and South Korea. South Korea has issued an arrest warrant for Kwon since September for alleged violations of capital markets regulations.
In February, the U.S. Securities and Exchange Commission (SEC) filed civil charges against Kwon, accusing him of violating the securities laws’ registration and anti-fraud provisions.
The collapse of the Terraform Labs ecosystem in May 2022, including the algorithmic stablecoin TerraUSD and the governance token Terra (LUNA), sparked industry-wide turmoil and led to the fall of other incumbents.
Crypto hedge fund Three Arrows Capital, broker Voyager Digital, and loan originator Celsius Network all filed for bankruptcy shortly after Terra’s demise. In the following months, cryptocurrency lender BlockFi and cryptocurrency exchange FTX also fell.