Cryptocurrency Boss Do Kwon Sentenced to Four Months in Jail for TerraUSD and Luna Tokens Collapse
Do Kwon, the prominent figure in the cryptocurrency industry responsible for the massive collapse of the terraced and Luna tokens, has been handed a four-month jail sentence in Montenegro. Mr. Kwon was found guilty of forging official documents, and his arrest took place in March while attempting to board a flight to Dubai at Podgorica Airport, the capital of Montenegro.
In addition to the conviction in Montenegro, Mr. Kwon also faces charges in the United States and South Korea regarding the downfall of the two digital tokens, which occurred last year. Han Chang-Joon, the former finance officer of Mr. Kwon’s company Terraform Labs, was also found guilty of the same charges and received a four-month prison sentence.
Mr. Kwon and Mr. Han initially pleaded not guilty during their first court hearing in May. The court has stated that the sentences will include the time already spent in detention since their arrest in March. Furthermore, they can appeal the verdict within eight days of receiving written notification from the court.
The troubles for Mr. Kwon escalated in February when US regulators charged him and his company, Terraform Labs, with “orchestrating a multi-billion dollar crypto asset securities fraud.” Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), stated that they alleged Terraform and Mr. Kwon failed to provide the public with full, fair, and truthful disclosure, as required for various crypto asset securities, notably Luna and TerraUSD.
Last year, a South Korean court issued arrest warrants for Mr. Kwon and five others connected to the case. Prosecutors believed Terraform Labs, a Singapore-registered company, violated capital market rules.
It is worth noting that Montenegro does not have extradition treaties with the United States or South Korea, which may complicate addressing the charges in those countries.
The collapse of the terraced stablecoin and the associated Luna token sent shockwaves through cryptocurrency markets in May 2022, leading to significant disruptions and financial losses for investors and stakeholders.