US Court Filings Expose Montenegro’s Prime Minister’s Stake In Failed Terraform Labs

A recent Bloomberg report has revealed that Montenegro’s Prime Minister, Milojko Spajic, personally invested in Terraform Labs years before the company’s collapse. The discovery has raised concerns regarding the founder’s choice to flee prosecution by seeking refuge in the same nation. 

The founder of Terraform Labs, Do Kwon, was detained in Montenegro in March 2023 and is currently facing extradition demands from the US and South Korea. 

According to Bloomberg, Milojko Spajic has claimed that the investment was made by Singapore-based company Das Capital SG, in which he was a partner. However, the independent Montenegrin newspaper Vijesti, which broke the news, reported that the holdings grew to nearly $90 million at one point. 

Spajic’s LinkedIn profile shows that he worked as a credit analyst and investor in Singapore from 2014 to 2020 before returning to Montenegro to serve as finance minister in late 2020. 

The revelations surrounding the prime minister’s investment have emerged at a critical time for Montenegro, where Spajic has led a “fragile” ruling coalition since October. 

As a NATO member and European Union candidate country, the controversy surrounding the prime minister’s involvement in a collapsed crypto firm has increased pressure from the opposition, who now demand Spajic’s resignation.

The prime minister’s investment details came to light in a lawsuit filed by the US Securities and Exchange Commission against Terraform Labs and Do Kwon. 

Kwon, the founder of the crypto firm, is facing prosecution linked to the $40 billion collapse of the TerraUSD stablecoin in 2022. 

In April, a civil trial in New York found the bankrupt company and Kwon personally liable for fraud, resulting in Terraform agreeing to pay $4.5 billion to settle the case with the SEC.

In light of these developments, Terraform CEO Chris Armani recently announced the complete dissolution of the company’s operations via a social media post on X (formerly Twitter).  

While expressing disappointment in the lawsuit’s outcome, Armani confirmed that TFL would cease operations and transfer ownership of the chain to the community.

On the other hand, Kwon has already served his local sentence in Montenegro after being detained using a fake passport. The justice minister of Montenegro favors sending Kwon to the US, while the courts support his extradition to South Korea. With multiple rulings, Kwon’s fate now lies in the hands of the High Court.

At the time of writing, the protocol’s native token, Luna Classic (LUNC), is trading at $0.000091, with sharp price declines of over 6% and 22% over the past seven and fourteen days, respectively.

Featured image from DALL-E, chart from TradingView.com