Montenegrin high court revokes bail for Do Kwon and former CFO

A Montenegrin high court has revoked bail for Terraform Labs co-founder Do Kwon and the former chief financial officer.

The court overturned an earlier decision, Marija Rakovic, a court spokeswoman, confirmed to DL News this afternoon.

An appeal against bail

Terraform Labs co-founders Do Kwon and Han Chang-joon, who were arrested at an airport in Podgorica in March while attempting to flee to Dubai using counterfeit Costa Rican passports, are now confronted with charges of conspiracy to commit fraud and market manipulation in the United States and South Korea.

In Montenegro, the duo had previously pleaded not guilty to the charges of utilizing forged documents.

However, following a court ruling on May 12, Do Kwon and Han Chang-joon were granted bail under the condition of paying €400,000 ($437,000) each. During this acceptance, Prosecutor Haris Šabotić voiced objections against the bail decision.

Šabotić pointed out the absence of specified conditions for monitoring the activities of the defendants under surveillance, in addition to concerns regarding the potential for the defendants to deliberately evade court hearings and further delay proceedings by failing to respond to court summons.

Days later, on May 17, the State Prosecutor’s Office in Montenegro’s capital Podgorica, appealed the bail, concurring with the prosecutor’s argument that a bail amount of 800,000 euros could not be considered as a reliable guarantee, and neither could the assurances provided by the duo that they would not flee upon their release from detention.

The court has reversed its decision to grant bail to Do Kwon and his associate, with the matter now being referred back to the basic court for approval, according to Rakovic. While the judges from both courts engage in ongoing deliberations over the status of the ruling, Kwon and Chang-joon will remain in custody.

Larger implications

Kwon’s alleged involvement in a multi-billion dollar crypto fraud scheme has garnered international attention, with jurisdictions worldwide searching for him. The collapse of the Terra (LUNA) network in 2022 had a significant impact on the crypto market, leading to the closure and bankruptcy of numerous businesses. 

The recent decision to revoke the granted bail underscores the seriousness of the allegations against Kwon and his co-accused, Han Chang-joon, and highlights the potential industry-wide repercussions of their actions. 

Around the same time reports of Do Kwon’s bail surfaced, Kwon cashed out $2.8 million worth of crypto before being released on bail in Montenegro.