The co-founder and CEO of Terraform Labs Do Kwon has been found guilty of document forgery in a fake passport case.
He has been sentenced to four months in jail by the Montenegro court.
Do Kwon and Terraform Labs are infamously known for the collapse of the Terra ecosystem, its algorithmic stablecoin $USTC and its sister coin $LUNA, all of which happened last year. The South Korean co-founder and CEO has been in the hot seat ever since this catastrophic event.
Back in March, Do Kwon was arrested at Montenegro’s Podgorica airport while attempting to travel to Dubai along with another Terra executive Han Chang-Joon. This was over the alleged possession of falsified documents. They have remained in custody since then as the Balkan country’s courts considered an extradition request from South Korea.
According to the court’s recent verdict, two Costa Rican passports, two Belgian passports and two identity cards belonging to Kwon and Han have been confiscated.
On the flip side, Do Kwon has reportedly repudiated any wrongdoing and has denied the allegations that he and his business partner had used forged passports. According to South Korean news outlet Segye Ilbo, he stated: “I filled out all the documents and received a Costa Rican passport through an agency in Singapore recommended by a friend.”
Kwon was then quoted saying that he had travelled all over the world with the Costa Rican passport and would not have done so if he had suspected it was a fake. He then claimed to have received the Belgian passports through another agency. However, he couldn’t recall the exact details of the specific agency when questioned by the prosecution.
According to Prosecutor Harris Chabotich, the two passports had different names and different dates of birth, which made it clear that they “were created with bad intentions”.
The South Korean national also faces allegations of making financial contributions to Milojko Spajić, who is the former finance minister of Montenegro and current leader of the Europe Now party. Kwon has decisively denied any financial relationship with the minister.
All of this comes on top of the already existing risk of criminal charges by the South Korean and US authorities that Kwon has been facing related to the collapse of his multi-billion dollar crypto enterprise Terra. Despite this, the former executive had repeatedly maintained he was “not on the run”.
Last year’s Terra crash had wiped out approximately $40bn in market value, causing several established crypto companies to go bankrupt.