Do Kwon Sentenced to Four Months for Passport Fraud in Montenegro

The two men were arrested in Montenegro in March while trying to board a flight to Dubai. They were charged with using forged Costa Rican and Belgian passports to travel through Montenegro’s airport. They pleaded not guilty to the charges.

Kwon, creator of the failed TerraUSD stablecoin, has been indicted in the U.S. on eight counts of fraud. He is also targeted for extradition by South Korea. The charges stem from last year’s collapse of the so-called algorithmic stablecoin TerraUSD and its sister token Luna, which wiped out some $40 billion of market value.

If convicted in South Korea, Kwon would likely face the longest jail term for a financial crime in South Korean history, according to Dan Sung-han, head of the team of South Korean prosecutors investigating the circumstances that led to the crash of the two cryptocurrencies. He said that he expected it could top the sentence of 40 years handed out last year for a fraud case involving Seoul-based hedge fund Optimus Asset Management.

Kwon has previously denied committing fraud, saying he believed in TerraUSD and personally lost money in its collapse.

On the passport charge, Kwon and Han can still appeal the Montenegrin court verdict within eight days of receiving a written copy of the verdict, according to the Basic Court in Podgorica.

Goran Rodić, the two men’s defense attorney, told The Wall Street Journal that after receiving the verdict and consulting with his clients, he would decide whether to file an appeal.

“Given their specific situation and the ongoing extradition proceedings in which they have also been detained,” Rodić said.

He said that it was still too early to discuss whether the two will be extradited and to which country.

“What is new for us is that we received notification from the court that, finally, tomorrow, we should go over the extradition files,” he said.

Write to Vicky Ge Huang at [email protected]