Terraform founder and fugitive cryptocurrency entrepreneur Do Kwon has been convicted of possessing forged documents by a court in Montenegro. Kwon, who was apprehended at a Montenegro airport with counterfeit passports, is also awaiting trial for a separate charge related to possible extradition.
The court stated that Kwon and his companion were found “guilty because they used a fake passport” from Costa Rica and were in possession of Belgian passports with different names. As a result, Kwon has been sentenced to four months in prison, and his legal representative has indicated that there are no immediate plans to appeal the verdict.
This conviction follows the court’s decision to extend Kwon’s custody for six months on the extradition charge. Both South Korea and the United States are seeking his extradition due to allegations of fraud that led to the collapse of his company, resulting in the loss of approximately $40 billion for investors and causing disruptions in the global cryptocurrency markets.
However, the extradition process is complicated by the fact that Montenegro does not have extradition treaties with either the US or South Korea.
Kwon, known by his real name Kwon Do-hyung, had been evading authorities for several months after fleeing South Korea and Singapore prior to the downfall of his company in May of the previous year. South Korean prosecutors had requested Interpol to issue a red notice for his arrest, and his passport was revoked.
Kwon’s arrest in Montenegro has sparked interest within the politically divided landscape of the country. During the lead-up to parliamentary elections, allegations surfaced linking the leader of the political party Europe Now, Milojko Spajic, to Kwon, which caused controversy. Analysts speculate that these allegations may have impacted Europe Now’s performance in the elections, as the party secured approximately a quarter of the votes and is currently working on forming a coalition.
Kwon’s TerraUSD, which was promoted as a “stablecoin” pegged to stable assets like the US dollar to minimize price fluctuations, gained attention in the cryptocurrency market. However, the crypto sector has recently faced increased scrutiny from regulators due to various controversies, including the collapse of the FTX exchange. Additionally, the failures of US crypto lenders Silvergate and Signature earlier this year caused disruptions and raised concerns in global markets.
