The sentence handed down by the court was deemed to be an appropriate punishment for the crime committed, as stated in the court’s official statement. Kwon and Han Chang-Joon have been in custody since their arrest and will serve their sentences before being extradited to either South Korea or the United States. The collapse of Terraform Labs’ crypto empire in May 2022 resulted in significant financial losses for investors.
In March 2022, Kwon and Han were apprehended in Montenegro on allegations of falsifying documents related to the issuance of UST stablecoins. It is claimed that these documents falsely represented that the UST stablecoin had reserves backing it, when in fact, this was not the case. Since their arrest, Kwon and Han have remained in custody.
Montenegro Court’s Decision: Sentence and Explanation
The Montenegro court has deemed the four-month prison sentence to be an appropriate penalty for the committed crime. Furthermore, the court has justified the confiscation of Kwon and Han’s passports and identity cards as necessary measures to prevent them from engaging in further criminal activities. The Montenegro High Court has recently upheld this decision, as stated in their official statement.
Montenegro’s capital, Podgorica, has emphasized the necessity of confiscating the objects used in the commission of the criminal offense, namely passports and identity cards, to apprehend the perpetrators and deter them from future criminal acts.
Losses for Investors and Regulatory Action
The collapse of Terraform Labs’ crypto empire has resulted in substantial financial losses for investors. CoinGecko reports that the LUNA cryptocurrency experienced a decline of over 99% in value following the collapse. Additionally, the UST stablecoin lost its peg to the US dollar, resulting in further losses for investors. Regulatory action has been initiated in response to the collapse, with the Securities and Exchange Commission (SEC) accusing Kwon of violating securities laws. Several other regulatory bodies have also launched investigations into the matter. Consequently, there are increasing demands for tighter regulation within the cryptocurrency industry.