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Montenegrin court agrees to release Terraform founder Do Kwon on bail

All News 22:54 May 12, 2023

PODGORICA, May 12 (Yonhap) -- A Montenegrin court agreed Friday to release Do Kwon, co-founder of cryptocurrency firm Terraform Labs, and his aide from jail on bail.

The Basic Court in Podgorica said it accepted the 400,000 euro (US$435,600) bail for each of the two South Korean nationals and will place them under house arrest with police supervision.

Kwon and his former chief financial officer, known only by his last name Han, who had been on the run over alleged massive fraud in South Korea, were arrested at Podgorica Airport in late March while trying to leave the country with forged passports.

The men pleaded not guilty and filed the bail request Thursday during their first court hearing.

Do Kwon, co-founder of cryptocurrency firm Terraform Labs (Yonhap)

Do Kwon, co-founder of cryptocurrency firm Terraform Labs (Yonhap)

Kwon, 32, fled South Korea while being investigated in connection with the crash of Terraform Labs' TerraUSD and Luna coins in May last year, which wiped out nearly 50 trillion won (US$37.5 billion) in market value.

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 another co-founder of Terraform Labs, Daniel Shin, 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.

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