Terraform Labs co-founder Do Kwon has been sentenced to four months of incarceration after being found guilty of forging his travel documents.
A Montenegrin Basic Court shared the verdict on June 19, noting that the time spent in custody will be included in the sentence.
Montenegro Court Sentences Kwon To Four Months In Jail
Terra creator Do Kwon was apprehended at Podgorica Airport in Montenegro while attempting to fly to Dubai. Kwon and his business partner Chang-joon Han were found carrying fake travel documents, including Costa Rican passports that Kwon says he didn’t know were invalid. “If I had suspected it was a fake passport, I would not have travelled to many countries,” Kwon reportedly said in a June 17 report from the South Korean publication Segye Ilbo.
“I filled out all the documents and received a Costa Rican passport through an agency in Singapore recommended by a friend,” Kwon posited, adding that he had traveled to multiple countries all over the world for years with the Costa Rican passport. He indicated that he was given the passport by an agency with a Chinese name he couldn’t remember.
Kwon also possessed a Belgian passport, which he claimed to have received through a different third-party agency.
Kwon and Han have remained in custody since March, when they were apprehended in the Balkan country. The pair are the subject of a jurisdictional tussle between prosecutors in the U.S. and their native country South Korea.
Kwon stressed the innocence of his colleague and former Terraform Labs Chief Financial Officer Han, telling the court, “If you are punished for a fake passport, let me be the only one.”
However, the prosecution urged the court to punish Kwon and Han, indicating that if a genuine establishment did not give the passport, it was made with wrong intentions.
The court said that two Costa Rican passports, two Belgian passports, and two identity cards belonging to Kwon and Han were also seized.
Kwon will be held in extradition custody for up to six months while the local court weighs South Korea’s extradition request.
Kwon And The Fall Of Terra
In May 2020, the Terra network’s algorithmic stablecoin UST lost its dollar peg, creating a rush for investors to sell their tokens. UST then entered a death spiral that saw over $40 billion wiped from the market. Hundreds of thousands of investors saw their life savings vanish into thin air, and the Terra blockchain eventually stopped.
Refusing to cooperate with criminal inquiries, Kwon fled from South Korea to Singapore shortly after Terra’s implosion. A South Korean court issued an arrest warrant for Kwon last September, alleging that the fallen crypto star broke capital markets laws.
Interpol also issued a red notice for him in September, making him a wanted man in 195 countries across the globe. Kwon, however, insisted that he was not “on the run” and maintained an active presence on Twitter.
Apart from rejecting the document forgery allegations, Kwon also denied claims that he made any financial contributions to Montenegro’s former finance minister Milojko Spajić, the current leader of the Europe Now party.