• Terraform Labs co-founder Do Kwon pleaded not guilty to allegedly using false passports from Belgium and Costa Rica.
• Kwon was arrested in March after search warrants were issued in South Korea in September.
• He and the company’s former chief financial officer Han Chang-joon are accused of forgery by Montenegro prosecutors and face up to five years in prison if convicted.
Terraform Labs CEO Charged with Forged Passport Usage
Do Kwon, co-founder of Terraform Labs, has been charged with forgery after allegedly using false passports from Belgium and Costa Rica. The charges came from Montenegrin prosecutors last month, and a defense lawyer proposed that both Kwon and his former chief financial officer Han Chang-joon be released on bail of 400,000 euros each. If they are convicted they could face up to five years in prison under Montenegrin laws.
Search Warrants Issued In South Korea
In September 2020, search warrants were issued in South Korea for the arrest of Do Kwon, leading him to flee until he was apprehended by police forces in March 2021.
Prior to its collapse almost a year ago, TerraUSD had been the largest algorithmic stablecoin. It is an algorithmic stablecoin that uses market incentives through algorithms to maintain a stable price which had been paired with a governance token called Luna which fell alongside it when the currency crashed.
SEC Charges Filed Against Terraform Labs & Do Kwon
The US Securities & Exchange Commission (SEC) filed charges against Terraform Labs and Do Kwon for defrauding investors in February 2021. It was claimed that both falsely promoted their cryptocurrency by repeatedly claiming it would increase in value when previously it had fallen below its pegged rate of $1 due to intervention from a third party who purchased massive amounts of UST tokens to restore it – an event which was omitted by Kwon & the company when publicly touting its restoration as a „triumph of decentralization“.