A Montenegro High Court has said no to Terra co-founder and CEO Do Kwon’s appeal of a four-month jail sentence in his document forgery case.
The South Korean national was arrested in the Balkan nation, along with his associate and Terra executive, Han Chang-Joon, in March this year for the alleged possession of falsified documents. The two have remained in custody since then.
In June, they were found to be guilty in the fake passport case and were sentenced to four months in jail by the Montenegro court.
In a statement published this Thursday, the High Court “rejected as unfounded the appeals of” this lower court judgment. According to a statement from the Basic Court of Montenegro capital Podgorica, the four-month prison sentence is “adequate” punishment for the crime committed.
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.
When Kwon and his associate were apprehended at Montenegro’s Podgorica airport, they were attempting to travel to Dubai with two Costa Rican passports, two Belgian passports and two identity cards belonging to both Kwon and Han.
The co-founder 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.”
He was also quoted saying that he had travelled all over the world with the Costa Rican passport and would therefore not have done so if he had suspected it was a fake. He got the Belgian passports through another agency, claimed Kwon. However, when he was questioned by the prosecution on this, he couldn’t recall the exact details of the specific agency.
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”. Despite this, the former executive has repeatedly maintained that he was “not on the run”.
On top of this, Kwon also faces the risk of criminal charges by the South Korean and US authorities related to the collapse of his multi-billion dollar crypto enterprise Terra.
The stablecoin issuer’s infamous crash had imploded the company in May 2022 following a major sell-off in UST/Luna, further wiping out approximately $40bn in market value, causing several established crypto companies to go bankrupt.
Recently, another co-founder of Terraform Labs, Daniel Shin, held Do Kwon responsible for the company’s collapse. South Korean authorities had indicted Shin in April 2023 on violations of capital-markets law, amongst other charges.
The top executive had then claimed that he had nothing to do with the collapse as he left the company two years before the failure. In Shin’s recent trial, his lawyers maintained the same stance, saying he “parted ways” with co-founder Kwon in 2020. They said that the “cause of the coin plunge was the unreasonable operation of the Anchor Protocol conducted by CEO Kwon and external attacks. It has nothing to do with Shin.”