Embattled Terraform Labs CEO Do Kwon will continue his time in police custody after a High Court in Podgorica overturned the trial court’s decision to release him on bail.
Bloomberg reported that the High Court has revoked the granting of bail following a spirited appeal by the prosecutors within the stipulated time frame. Marija Rakovic, a spokesperson for the court, confirmed the reports as the case reverts to the trial court.
“The Basic Court should now make another decision, taking into account what the High Court ruled,” said Rakovic, according to the report.
Kwon and his colleague Han Chong-joon were apprehended in Montenegro in possession of fake travel documents after a lengthy global search. Montenegrin authorities announced it would prosecute the duo for falsifying passports before entertaining any extradition request.
The Basic Court approved the bail conditions of $430,000 and the requirement of a house arrest, but the prosecution appealed the decision. The crux of their argument hinged on the fact that the defendants posed a significant flight risk, underscored by their 12-month hide-and-seek with South Korean authorities.
Aside from the concerns of being flight risks, the High Court revoked the bail conditions on the fact that it “could not establish the value of their assets just based on their statements.” The court said the defendants failed to submit concrete evidence supporting their claims.
The defendants are expected to appear in court on June 16 to begin their defense for the charges of faking a Costa Rican passport. If found guilty, Kwon and Han face up to five years in prison.
South Korean authorities have begun unearthing Kwon’s assets after discovering an officetel, an apartment complex, and imported cars worth $176 million. Adding to the wave of his arrest, Serbian law enforcement identified an apartment in the country and a business entity suspected to be used to launder funds.
South Korea pledges to jail Kwon for 40 years
South Korean prosecutors revealed that they had garnered enough evidence to put Kwon behind bars for up to 40 years in connection with his role in Terra’s collapse. The claims are coming in the middle of an extradition dogfight with the U.S. over Kwon as both sides make spirited pitches to the Montenegrin Justice Department.
“Given the nature of this incident, we think investigating the case in South Korea would be the most efficient way of bringing justice,” Dan Sung-han, head of the Terra investigating team, said.
Meanwhile, the U.S. Department of Justice (DoJ) is charging Kwon with securities fraud, price manipulation, and wire fraud, among others, in connection with stablecoin TerraUSD (UST) de-pegging.
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