Four-Month Imprisonment for Terra Co-Founder, Do Kwon, Over Alleged Passport Forgery

Updated: 12 August 2023

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According to the Montenegro Basic Court’s website, Terraform Labs’ co-founder Do Kwon has received a four-month prison sentence in Montenegro. This verdict follows his court denial of allegations that he and his business associate, Chang-joon Han, made use of fabricated passports.

If I had suspected it was a fake passport, I would not have traveled to many countries.

Kwon’s defense, as reported by South Korean news outlet Segye Ilbo, revolved around his ignorance regarding the alleged falsification of the Costa Rican passport he was found with. Kwon stated in the Montenegrin Basic Court last week that he had no suspicions about the passport being counterfeit, as he had traveled to numerous countries with it. Kwon argued, “If I had suspected it was a fake passport, I would not have traveled to many countries.”

In addition, Kwon clarified that he obtained the Costa Rican passport through an agency in Singapore, a referral from a friend. He revealed that this passport had accompanied him on his travels worldwide. Kwon also possesses a Belgian passport, which he claims to have procured through another agency.

Kwon and his former chief financial officer at Terraform Labs, Han, were apprehended at Montenegro’s Podgorica airport in March. The two were attempting to embark on a trip to Dubai with what are alleged to be counterfeit documents. This incident followed the downfall of the Terra ecosystem in 2022. Both Kwon and Han are now the focus of a jurisdictional dispute between prosecutors in the U.S. and South Korea.

In response to the prosecution’s query regarding the specific agency that provided his passports, Kwon confessed he could not remember the exact details. He only remembered that the agency’s name was in Chinese but could not offer any further information.

Kwon also defended his associate Han in court, expressing that if someone had to face punishment for a counterfeit passport, he should be the only one. The prosecution, however, pleaded with the court to sentence both Kwon and Han. They argued that the passport, if not issued by an authorized institution, was created with malicious intent.

The official court verdict was due for delivery on Monday, June 19.

The collapse of Terra LUNA

The significant role the collapse of the Terra ecosystem, its algorithmic stablecoin UST, and its sister coin LUNA played in the prolonged crypto winter of the crypto industry is undeniable. This collapse coincided with a severe drop in the prices of Bitcoin and other major cryptocurrencies. It had catastrophic impacts on various established crypto companies like Three Arrows Capital (3AC), Voyager Digital, and Celsius Network, leading to their bankruptcy.

Aside from refuting the allegations of document forgery for his travels, Kwon also dismissed accusations of making financial contributions to Milojko Spajić. Spajić is Montenegro’s ex-finance minister and the current head of the Europe Now party. As per a report by Radio Free Europe, the South Korean entrepreneur categorically denied having any financial ties with Spajić or contributing in any way to his political campaign funding.

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