- Despite the original favorable ruling, a higher court in Montenegro denies bail.
- Terra founder Do Kwon will stay behind bars until the forgery case is solved.
- Do Kwon and TerraForm are also charged with market manipulation by the SEC.
The High Court of Montenegro overturned the initial decision by a Podgorica court to grant TerraForm Labs founder Do Kwon bail. Initially, the Montenegrin law granted the proposed $436,400 bail for both defendants – Do Kwon and his travel partner Han Chang-joon.
However, the High Court vetoed this decision, which was taken against several state attorneys’ recommendations not to grant the evasive crypto entrepreneur bail. Montenegrin lawyers explained that the crypto fugitive is definitely “a flight risk” and has no plausible intention to stay in the Balkan country.
Ultimately, this means that the founder is in for an extended stay in one of Europe’s most notorious prison systems, often condemned by human rights activists. Mr. Kwon is facing document forgery charges, as the pair were captured trying to board a private jet to Dubai with a stash of fake documents.
Battle Of Extradition: U.S. or South Korea?
While the document forgery case is yet to be resolved, Do Kwon faces more brushes with the law on his home soil of South Korea and the United States. The South Korean authorities have set up a special task force to investigate the market manipulation of TerraForm Labs. The blockchain company emerged in South Korea first before switching to Singaporean headquarters.
Elsewhere, the US Securities and Exchange Commission (SEC) charged TerraForm Labs and its CEO with defrauding customers and manipulating the price of the tokens in the Terra Luna ecosystem. This brought about terrible financial losses for investors, who were told the malfunctioned Terra Classic USD (USTC) and sister token $LUNC were “safe investments.”
Ultimately, South Korean authorities have more chances to reach for Do Kwon’s repatriation, as the special task force also targets nine other co-founders of the struggling blockchain company. In any case, the SEC, South Korean authorities, and Singapore will likely be joining forces to gain clarity and have a chance at retrieving the embezzled funds.
On the Flipside
- According to Bloomberg, the High Court of Montenegro already has a decision regarding Do Kwon’s extradition.
- The lower court of Podgorica has to decide, per the High Court, to initiate the deal.
Why This Matters
Terra Luna’s crash in May 2022 resulted in a market-wide domino effect linked to around $2 trillion in crypto funds being wiped out.
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