A Montenegro court has granted an extension of Do Kwon’s custody for an additional six months, according to reports from Radio Free Europe.
The decision was made as the court considers South Korea’s extradition request. Kwon’s arrest in late March stemmed from allegations of using forged travel documents.
The judge of the Higher Court in Montenegro stated that the six-month detention was warranted due to the ongoing extradition case requested by South Korea.
In a recent development, the same Montenegro court that extended Kwon’s custody had previously approved his bail request in a document forgery case.
This decision marks a change from the court’s earlier rejection of his bail application. Kwon’s legal proceedings have been complex and fraught with challenges.
Do Kwon faces a slew of charges in the United States, including securities fraud, wire fraud, commodities fraud, and conspiracy
US prosecutors allege that Kwon made false and misleading statements during a TV interview regarding the adoption of the Terra blockchain.
The US Securities and Exchange Commission (SEC) has also filed a lawsuit against Terraform Labs and Kwon for their alleged involvement in a multibillion-dollar cryptocurrency fraud.
The SEC claims that billions of dollars were raised from investors through the sale of “crypto asset securities” related to Terra’s stablecoin, TerraUSD, and the cryptocurrency Luna.
South Korean prosecutors are reportedly targeting Do Kwon’s cryptocurrency assets. It is alleged that Kwon transferred tens of millions of dollars from a crypto wallet belonging to Luna Foundation Guard (LFG), a defense mechanism for TerraUSD’s peg to the US dollar.
The whereabouts of the $29 million worth of digital tokens transferred from LFG’s wallet is currently unknown.
TerraUSD, a stablecoin created by Terraform Labs, aimed to maintain a $1 peg using algorithms and trader incentives involving its sister token, Luna.
However, in May of the previous year, the stablecoin lost its dollar peg due to market sell-offs. Although Terraform Labs managed to partially repair the peg by purchasing $2 billion worth of UST, ongoing sell-offs depleted those funds, led to hyperinflation of Luna, and caused a crash in the prices of both Luna and UST.
