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Terraform co-founder pleads not guilty, seeks bail in Montenegro

All News 23:34 May 11, 2023

PODGORICA, May 11 (Yonhap) -- Do Kwon, a cryptocurrency firm founder who has been detained in Montenegro after being on the run over alleged massive fraud in South Korea, has applied for bail, according to local court officials Thursday.

Also known by his full name, Kwon Do-hyeong, he pleaded not guilty and filed the bail request with a district court in the Balkan country, where he was arrested in March on charges of forging his passport and falsifying other official documents, officials said.

An aide of Kwon's, known only by his last name Han, who has been detained alongside him, also applied for bail.

Kwon and Han offered to each pay 400,000 euros (US$436,000) in bail money.

Kwon, 32, had been on the run after fleeing his country while being investigated in connection with the crash of his cryptocurrency firm Terraform Labs' TerraUSD and Luna coins in May last year, which wiped out nearly 50 trillion won (US$37.5 billion) in market value.

Appearing at the court hearing for bail, Kwon claimed his Costa Rican passport was legitimate and that he has done nothing illegal.

Kwon refused to comment when a reporter asked how much exactly his assets are worth.

The next court hearing is set for June 16.

The South Korean prosecution has sought the extradition of Kwon. Interpol has also issued a red notice, which is used for the highest level of wanted suspects and criminals. Kwon is also facing criminal charges in the United States.

The Seoul Southern District Prosecutors Office in charge of the case said it began the process to freeze Kwon's assets in the country, worth some 7.1 billion won.

Kwon and Daniel Shin, another co-founder of Terraform Labs, have been accused of running a Ponzi scheme that led to the loss of billions of won following the crash of the TerraUSD and Luna coins.

TerraUSD was designed as a stablecoin, which was pegged to stable assets, such as the U.S. dollar. But holders of TerraUSD and Luna lost more than an estimated $40 billion in market value after the stablecoin plunged far below its $1 peg last May.

Shin has been indicted in South Korea without physical detention on multiple charges, including fraud, breach of duty and embezzlement.

Terraform co-founder pleads not guilty, seeks bail in Montenegro - 1


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