In a verdict that has sent ripples through the crypto world, Terraform Labs founder Do Kwon has been handed a four-month sentence by a Montenegrin court, found guilty of document forgery.
Kwon, along with his colleague and former Terraform Labs CFO, Han Chang-Joon, were arrested in Montenegro in March and have been in custody since. Despite being granted bail on their second attempt, the pair have remained in custody, the time spent which will be deducted from their sentences
The court also declared the confiscation of multiple forged documents, including two Costa Rican passports, two Belgian passports, and identity cards belonging to Kwon and Han1.
The defense and the repercussions
Kwon defended himself by claiming he was unaware of the forged status of his travel documents, blaming a “Chinese-named agency” for the predicament. Despite traveling with the Costa Rican passport for years, he maintained that he had no reason to doubt its authenticity.
The verdict follows an international manhunt initiated by South Korean and U.S. authorities for Kwon, which included a request for a red notice from Interpol. The charges against Kwon and Han are believed to be linked to their involvement in the multi-billion dollar crypto enterprise Terra, which collapsed in May 2022.
In an interesting twist, Kwon also denied allegations of making financial contributions to Milojko Spajić, former finance minister of Montenegro and current leader of the Europe Now party. The connection between the accused and Spajić, if any, remains unclear and will likely be a focal point of any ongoing investigation.