Do Kwon, co-founder and CEO of Terraform Labs, has been indicted by Montenegro prosecutors nearly a month after his arrest. Kwon has been charged with using fake passports and other identification documents in an attempt to flee Montenegro on March 23, 2023, and the prosecutors have requested that his detention with his associate, Han Chang-Joon, be extended. The charges are likely to negatively impact efforts to extradite him to both the United States and South Korea where he faces several charges, including fraud and violations of the Digital Millennium Copyright Act (DMCA).
Kwon and his associate were detained by local law enforcement while they were attempting to leave for Dubai via a private jet. Police found Kwon with a fake Costa Rican passport, and the prosecutor’s indictment suggests that Kwon had been using these documents to try and evade authorities.
Kwon and Han had been residing in a Belgrade apartment for around six months, which was purchased for approximately $2.2 million by Han in September 2022, before attempting to fly out of Montenegro. The apartment was recently seized by local law enforcement, giving more details about the work they had been doing in Southeast Europe.
Initially, the Montenegro court ruled that both Kwon and his associate should remain behind bars for 30 days. However, prosecutors have asked for an extension, and after the decision on the extension of detention, more information is expected to be made available to the public. Prosecutors have said that if the two men are convicted of these charges, they are likely to be given between three months to five years in prison.
Kwon was considered a leading figure in the blockchain and cryptocurrency spaces before his arrest, garnering much attention for his work with Terraform Labs and his involvement in other related projects. His arrest and indictment have been a blow to the entire crypto industry.
This is not the first time that Kwon has been in legal trouble. Kwon and his partner Daniel Shin have been involved in a legal battle with blockchain project Loom Network. In February this year, Loom Network filed a lawsuit against Kwon and Shin for alleged “fraudulent activity, breaching employment agreements, and committing copyright violations.”
Kwon’s alleged involvement in these legal issues raises questions about the operations of some blockchain projects and their treatment of investors, clients, and staff. It also highlights the need for clearer industry regulations that can deter such behavior and provide investors with a better level of protection.
The case involving Kwon is still ongoing, and any developments will be closely watched by the entire blockchain and cryptocurrency industry. It remains to be seen what the outcome ultimately will be and how it will impact the industry going forward.