Terra’s Do Kwon jailed for 4 months

People who lost money and investment in the Terra debacle of 2022 might feel some sort of satisfaction after reports came in on Monday that Do Kwon, the mastermind behind the collapse of Terra (Luna and UST), has been sentenced to four months imprisonment in jail.

As the CEO of TerraLabs, Do Kwon helped in creating the algorithmic stablecoin TerraUSD and the native cryptocurrency of the Terra blockchain, LUNA. However, the digital assets collapsed in May last year, wiping out over $40 billion from the crypto market.

Although this sentence is not directly connected to his role in the Terra downfall, it is a significant development in the series of lawsuits that have been launched against Do Kwon in the past 13 months.

Read also: Terra’s Do Kwon is back in jail 

Do Kwon has been sentenced in Montenegro 

A Basic Court in Podgorica Montenegro Sentenced Do Kwon to four months in jail for possessing forged passports and travel documents on Monday. Han Chong-Joon, former Chief Financial Officer at Terralabs was also found guilty of the same crime by the court and has received the same sentence, according to a Reuters report.

Recall that both Terra executives were arrested in Montenegro earlier this year while they were attempting to travel to Dubai through a private jet. They were charged with using forged Costa Rican and Belgian passports to travel through Montenegro’s airport. They pleaded not guilty to the charges.

Related post: Terraform’s Do Kwon pleads not guilty to fake travel documents 

Last week, Do Kwon told the court that he obtained the travel documents from an agency in Singapore recommended by his friend and he denied knowing that the documents were forged.

Now, this sentencing is coming weeks after the court granted a €400,000 bail each to Kwon and Han – an initial bail granted in May was voided by an upper court following an appeal by the prosecutor that the executive’s property had not been properly assessed. 

Per the Reuters report, the duration of the time both had spent in detention will be factored into the sentence and the court said they had the option of appealing the verdict in a higher court within eight days of receiving a written copy of the verdict.

Request for extradition 

In February, regulators in the United States charged Do Kwon with securities fraud, with federal prosecutors following this up with fraud charges, both over the failure of the cryptocurrency projects. 

Also, South Korea issued an arrest warrant against the Terraform Labs Founder. Despite being granted bail last week, the Montenegro Court confirmed that it is keeping Do Kwon in ‘extradition custody’ for six months to consider an extradition request by South Korea. Note that the United States has also asked for him to be extradited.

According to Dan Sung-Han, head of the team of South Korean prosecutors investigating the circumstances that led to the crash of Terra, If convicted in South Korea, Do Kwon would face the longest jail term for a financial crime in South Korean history.

However, Do Kwon in a handful of times has denied committing fraud, saying he believed in Terra and he lost money in the collapse.