Montenegrin court upholds decision to grant bail to Terraform co-founder

ROME, June 4 (Yonhap) -- A Montenegrin court has once again granted bail to Do Kwon, co-founder of cryptocurrency firm Terraform Labs accused of fraud in South Korea and the United States, dismissing an appeal by local prosecutors to revoke the decision.

The district court in Podgorica, Montenegro, announced in a notice released Friday (local time) that it has agreed to grant bail to Kwon and his aide, known only by the surname Han, on condition they each pay 400,000 euros (US$428,241) in bail money and are placed in confinement under police surveillance.

Kwon, 32, and Han had been on the run after fleeing South Korea while being probed in connection with the crash of Terraform Labs' TerraUSD and Luna coins in May last year, which wiped out nearly 50 trillion won (US$38 billion) in market value.

The two were arrested at Podgorica Airport in late March while trying to leave the country with forged passports. In May, they applied for bail and offered to each pay 400,000 euros and the district court granted the request.

Prosecutors, however, appealed to an upper court, requesting the decision be revoked. They said the proposed bail money is substantially small compared to Kwon's overall wealth and cited concerns of the two fleeing.

The upper court in Podgorica accepted the request and rescinded the bail, but the lower court again granted their release on bail, according to the latest announcement. It said that the decision was made on the assessment that the bail money was not a small sum given their asset size.

A local attorney representing Kwon and his aide have recently submitted a document showing their financial status as evidence to the district court, according to Vijesti, a Montenegrin newspaper.

Prosecutors can appeal the lower court's decision within three days.

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 U.S.

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.

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