Do Kwon, Founder of Terraform Labs, sentenced to 4 months in jail for document forgery.
The CEO and co-founder of Terraform Labs, Do Kwon, has been convicted of document forgery and sentenced to four months in jail. Kwon was found guilty and sentenced by a Basic Court in Podgorica, the capital of Montenegro.
In March, authorities in Montenegro arrested Kwon for carrying fake documents. Another executive at Terraform Labs, Han Chang-Joon, was also arrested and both have been in custody since then.
Although the Podgorica High Court had approved bail for the executives, a local news outlet RFE reported that Kwon would remain in custody for six months while local courts consider an extradition request from South Korea. The Podgorica High Court confirmed this to blockchain.
Both South Korea and the US have requested Kwon’s extradition. They want him to answer for the collapse of Terraform Labs, including the LUNA and UST cryptocurrencies.
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Bail Conditions Denied for Do Kwon Before Guilty Verdict
Last month, a Basic Court in Podgorica agreed to a bail proposal initiated by Kwon’s attorneys to release the CEO and Chang-Joon. The proposal involved supervised bail, with each person paying 400,000 euros (or $435,000) as the trial progressed. Following the approval, the plaintiff quickly appealed the decision to a High Court in Podgorica, which eventually ruled against the approval.
The court’s ruling specified that the four-month sentence will include the time the executives have already spent in custody. The ruling also instructed authorities to confiscate two Belgian passports, two Costa Rican passports, and two ID cards owned by the two executives.
Last May, the National Tax Agency of South Korea found Do Kwon and Terraform Labs guilty of tax evasion and fined them $78 million. According to the agency, Terraform and Do Kwon violated the South Korean Corporate Tax Act, which requires foreign companies to pay tax if managed domestically, regardless of the country of registration. The agency also alleges that before the Terraform crash, Kwon tried to liquidate the company and exit South Korea.
In September of last year, South Korea began searching for Do Kwon and even asked Interpol to issue a “Red Notice” for Kwon. However, Do Kwon declared on Twitter that he was not guilty of anything and was not on the run. He also said there was no need for anyone to know his precise GPS coordinates, adding that he will defend himself against any accusations.
“I am not ‘on the run’ or anything similar — for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide. We are in the process of defending ourselves in multiple jurisdictions — we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months.”