Terraform’s Do Kwon pleads not guilty to fake travel documents charges

Terraform Labs co-founder Do Kwon pleaded not guilty in a Montenegrin court on Thursday to a charge of forging his passport and travel documents.

Kwon’s hearing comes a month after Kwon and Chang-joon Han, Kwon’s former colleague, who also pleaded not guilty, were arrested at the airport in Podgorica, the capital of Montenegro, while trying to fly to Dubai. Their lawyer requested conditions for bail at €400,000 ($437,000) each and proposed house arrest in Montenegro. The next court hearing is set for June 16.

On May 7, 2022, Terraform Labs’ stablecoin TerraUSD (UST), an algorithmic stablecoin that worked with its sister coin, Luna, lost its $1 peg. The event wiped out approximately $40 billion in market value, collapsing an array of crypto firms. 

A year after the crash, Kwon is now in jail in Montenegro and being investigated in the U.S. and South Korea. If Kwon is convicted of falsifying his documents, he may have to serve his prison sentence in Montenegro before being extradited to the U.S. or South Korea, the Montenegrin Justice Ministry said in March. 

As a reminder of what happened to Terraform and founder Kwon over the past 12 months, we present the slow-motion disaster as it played out for the now five-year-old company, which launched its TerraUSD stablecoin and Luna in 2019 and then relocated its headquarters to Singapore in 2020:

May 2022 

• Terraforms Labs’ stablecoin Terra, which was supposed to maintain a 1:1 peg to the U.S. dollar, crashed on May 7, 2022. 
• A group of crypto investors in South Korea filed a lawsuit against Kwon. (May 19, 2022) 

Terra’s UST crash will make life harder for crypto as regulation looms

June 2022 

• South Korea launched investigations into Terraform Labs.  
• Seoul prosecutors blocked 15 former employees of Terraform from leaving South Korea while they investigated the crypto firm behind failed TerraUSD and Luna. (June 21, 2022) 

September 2022 

• South Korean prosecutors issued an arrest warrant for Kwon and five employees of Terraform. (September 14, 2022)
• South Korean Prosecutors asked the South Korean foreign ministry to invalidate the passports of Kwon and four others linked to Terraform Labs.
• South Korean prosecutors said Kwon, who had claimed he was not on the run, was obviously on the run. (September 18, 2022)  
• The International Criminal Police Organization (Interpol) issued a red notice for Kwon, requesting law enforcement agencies worldwide search for and arrest the Terraform Labs founder. (September 26, 2022)

October 2022

• The South Korean government ordered to nullify Kwon’s passport, intensifying pressure on the crypto entrepreneur to return to his country. (October 5, 2022) 
• Kwon said that South Korean prosecutors’ charges against him were not legitimate and were politically motivated. (October 18, 2022) 

December 2022

• South Korean prosecutors said Kwon flew to Serbia via the United Arab Emirates. 

February 2023

• The SEC sued Kwon and Terraform, alleging they defrauded the U.S. investors who purchased TerraUSD and Luna. (February 17, 2023) 

March 2023

• Singapore authorities launched a probe into the collapse of Terraform Labs, per a report by Bloomberg published on March 3 when Kwon’s whereabouts became unknown. (March 3, 2023) 
• Kwon and Han were arrested at the airport in Podgorica, the capital of Montenegro, on March 23
• Both the U.S. and South Korea seek Kwon’s extradition to face charges in the wake of his arrest in Montenegro in March. 

April 2023

• A local media outlet reported on April 13 that Kwon sent 8 million won (~$7 million) to Kim & Chang, a legal firm in South Korea, before the collapse of Terra and Luna. This suggests that Kwon was aware of the crisis and expected a legal case that might happen. 
• A judge in the U.S. denied Kwon and Terraform’s call that they had asked the Securities and Exchanges Commission (SEC) to withdraw the request to access documents regarding Terraform and Luna Foundation Guard (LFG) from the Monetary Authority of Singapore.  (April 18, 2023)
• Terraform’s co-founder Shin was indicted in connection with the crash of TerraUSD and Luna on charges including violations of capital markets law in South Korea, fraud and embezzlement. South Korean prosecutors froze assets tied to the people worth about 246.8 billion won ($184.7 million). A spokesperson of the Korean prosecutors confirmed to TechCrunch that Shin’s first trial will be held on May 26. 

May 2023 

• South Korean prosecutors’ joint financial crimes team director Sung-han Dan said in an interview with The WSJ: “Investigating the case in South Korea would be the most efficient way of bringing justice,” as most key accomplices and evidence linked to the Terraform incidents are based in South Korea. 
• This week, South Korea froze about 233.3 billion won ($176 million) of Kwon’s assets and properties, the Seoul prosecutor’s office confirmed to TechCrunch. A South Korean court has banned the sale of Kwon’s house, cars and financial assets such as securities, bank deposits and cryptocurrencies on cryptocurrency exchanges. 

 

Terraform’s Do Kwon pleads not guilty to fake travel documents charges by Kate Park originally published on TechCrunch

source https://techcrunch.com/2023/05/11/terraform-co-founder-do-kwon-pleads-not-guilty-to-fake-travel-documents/