Terraform founder, 'crypto fugitive' Do Kwon found guilty of forgery by Montenegro court

Fugitive cryptocurrency entrepreneur Do Kwon has been found guilty of possessing forged documents by a Montenegro court. Kwon, the founder of Terraform, was arrested at an airport in Montenegro with fake passports. He is still awaiting trial for another charge related to his possible extradition.

Fake passport and prison sentence

As per AFP, in a statement, the court said that Kwon and his travel companion were "guilty because they used a fake passport" from Costa Rica at the airport. Additionally, the court revealed that the duo had Belgium passports under different names in their possession.

Kwon has been sentenced to four months in prison, and his attorney stated that there were no immediate plans to appeal the ruling.

This verdict follows a recent decision by the court to extend their custody for six months for the extradition charge.

Both Seoul and Washington are seeking Kwon's extradition due to his alleged involvement in fraud that led to his company's collapse, wiping out about $40 billion of investors' money and causing turbulence in global crypto markets.

However, Montenegro does not have extradition treaties with the US or South Korea, complicating the process of bringing Kwon to justice in those countries.

On the run

Kwon, whose real name is Kwon Do-hyung, had been on the run for several months after fleeing South Korea and Singapore before his company's crash in May the previous year.

South Korean prosecutors had requested Interpol to issue a red notice for Kwon's arrest, and his passport was revoked.

Kwon and Montenegro

Since his arrest in Montenegro, Kwon has become a subject of intrigue in the country's politically divided landscape.

AFP reports that during the lead-up to parliamentary elections, controversy arose when interim Prime Minister Dritan Abazovic and his allies accused Milojko Spajic, the leader of Europe Now, of having connections with Kwon.

Political analysts speculate that these allegations may have affected political party Europe Now's performance in the polls, as they secured around a quarter of the votes and are currently working on forming a coalition.

'Stablecoin' TerraUSD

Kwon's TerraUSD was promoted as a "stablecoin," typically pegged to stable assets like the US dollar to minimise price fluctuations.

In recent days, cryptocurrencies have faced increased scrutiny from regulators due to controversies, including the collapse of the FTX exchange.

Additionally, the digital currency sector has also been impacted by the failures of US crypto lenders Silvergate and Signature, which contributed to banking concerns earlier this year and caused disruption in global markets.