Terraform Labs founder Do Kwon and his former chief financial officer Han Chong-Joon have been granted bail by a court in Montenegro.
According to media reports, the court decided to release Kwon and Han to house arrest under police supervision on bail of €400,000 each, which is about $436,000 at current exchange rates.
Kwon and Chong-Joon were arrested in March at an airport in Podgorica, the Montenegrin capital, while trying to flee to Dubai with fake Costa Rican passports. They are facing charges of conspiracy to commit fraud and market manipulation in the U.S. and South Korea.
The two men had pleaded not guilty to using forged documents in Montenegro. Their defense lawyers also argued that they are not a flight risk and have been cooperating with the authorities since their arrest.
Prosecutors in the case, however, claimed that Kwon and Han have “zero interest” in staying in Montenegro and that they pose a threat to public order and security.
Kwon was pursued by South Korean and US authorities
Do Kwon is the creator of Luna, a crypto token once valued at $116, and TerraUSD, a stablecoin that was supposed to maintain a 1:1 peg with the U.S. dollar.
However, in May 2022, both tokens lost their value, triggering a $40 billion crash in the crypto market.
In the aftermath of the crash, Korean authorities accused Kwon and several other individuals connected to Terraform Labs of violating the Korean capital markets law and issuing fraudulent securities.
A federal court in New York also accused Kwon of conspiring to commit wire fraud, commodities fraud, and securities fraud in September 2022.
Kwon has repeatedly denied the allegations and claimed he was not “on the run” and was “in full cooperation” with government agencies. He also blamed the collapse of his tokens on external factors such as market volatility and regulatory uncertainty.
The former Terra chief has said he is working on restoring the value of Luna and TerraUSD and compensating the investors who lost money.