Kwon and Terraform CFO released on bail by Montenegro court

Kwon and Terraform CFO released on bail by Montenegro court

by Eden Merion
1 min read
Montenegro Court Agrees To Release Terraform’s Kwon and CFO on Bail

Source: screenshot of CNBC Youtube video

A court in Montenegro accepted bail For release Terraform Labs co-founder Do Kwon and former CFO Han Chang-joon jail on Friday after being prosecuted for alleged use of false documents.

By accepting the 400,000 euros deposit for each of themthe court in Podgorica said that the two people would not be allowed to leave their homes.

Kwon had been on the run for months after the bankruptcy of Terra, which was behind the algorithmic stablecoin TerraUSD which went into freefall last year.

Kwon and Chang-joon were accused of forgery by prosecutors in Montenegro last month for allegedly using fake passports of Belgium and Costa Rica.

But both defendants have pleaded not guilty.

After search warrants were issued in South Korea in September for his arrest, Kwon was only arrested in March in Montenegro where he had sought refuge.

The use of false documents can be punishable by five years in prison under Montenegrin laws, according to Bloomberg.

Return on the bankruptcy of Terra

TerraUSD is a algorithmic stablecoin that uses market incentives through algorithms to maintain a stable price.

TerraUSD was also the largest algorithmic stablecoin before collapsing nearly a year ago, killing billions of dollars.

Months after the fall of Terra, the U.S. Securities and Exchange Commission accused Terraform Labs and Kwon of allegedly defrauding investors.

The agency said Kwon and Terraform promote their crypto by repeatedly claiming that the tokens will increase in value.

The complaint also detailed other events within the company, including the fact that TerraUSD fell from its peg in May 2021.

Two years ago, TerraUSD fell below $1, and Kwon “secretly discussed with a third party to have that third party buy massive amounts of UST to reestablish TerraUSD’s $1.00 peg,” said the SEC.

When TerraUSD was reset to a value of $1, Kwon and company “publicly and repeatedly touted the restoration of the UST$1.00 peg as a triumph of decentralization,” among other reasons, while omitting the real reason the peg was restored, actually through a third party, the SEC said.

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