Do Kwon to Be Released on €400,000 Bail, Pleads Not Guilty in Montenegro

Terraform founder Do Kwon will be released from jail but placed under police surveillance at a local residence, a Montenegrin court has decided. The trial against him and another Korean, on charges of travelling on false documents, opened on Thursday with both pleading not guilty.

A first instance court in Podgorica has agreed to release the founder and former chief executive of failed blockchain firm Terraform Labs, Do Kwon, and another South Korean citizen on bail, local and foreign media reported. They are charged with attempting to use forged personal documents in the small Balkan nation.

Do Kwon, or Kwon Do-Hyung as is his full name, was arrested by Montenegrin authorities on March 23 while trying to board a flight for Dubai on a Costa Rican passport. He was detained together with a companion identified by his surname, Han. Previous reports have suggested that is the company’s Chief Financial Officer, Han Chang-joon.

On Friday, the court accepted 400,000 euros ($435,000) in bail for each of the two suspects, pending the outcome of their trial which started a day earlier, the Associated Press and the Vijesti news portal informed. However, they will not be allowed to leave their apartment which will be guarded by the Montenegrin police.

“They promised … they will not hide until the end of the criminal procedures, that they will regularly answer court summons and that they will be available at the address submitted by their attorney,” the court said. “If the defendants run away or violate the surveillance measure, the bail will fall through,” the statement added.

The accused South Korean natives have pleaded not guilty to the charges pressed against them by Montenegrin prosecutors. Authorities in both Seoul and the U.S. are seeking the extradition of Do Kwon in connection with the $40 billion crash of the Terraform ecosystem’s cryptocurrency luna and stablecoin terrausd. It has been estimated that around 200,000 people bought the coins and suffered heavy losses when their value evaporated.

Kwon disappeared after departing for Singapore in April 2022, right before the collapse of the two digital currencies, and was wanted on a red notice from Interpol for alleged fraud and financial crimes. He then fled to Serbia, where he reportedly registered a new firm, before eventually ending up in neighboring Montenegro, where he can be sentenced to up to five years in prison.

In late March, Do Kwon’s Montenegrin lawyer was quoted as saying that the crypto entrepreneur would have to first stand trial in the country for traveling on fake documents before he is extradited. The fugitive may also have to serve prison time there before he is handed over to any other jurisdiction, Montenegro’s justice minister indicated.

Earlier on Friday, South Korean media reported that Kwon has refused to declare his assets, when he was asked how he planned to pay the bail during the hearing in Podgorica. According to the public broadcaster KBS, he told the court that his wife will make the payment, explaining that the two of them own a $3-million apartment in South Korea. Kwon is widely suspected of having stashed large amounts of money from the alleged crypto fraud, the report noted.

Do you think Do Kwon will attempt to escape justice in Montenegro and avoid extradition? Share your thoughts on the case in the comments section below.