Montenegro court finds crypto fugitive Do Kwon guilty of forgery

PODGORICA, Montenegro, - A Montenegro court on Monday found fugitive cryptocurrency entrepreneur Do Kwon guilty of possessing forged documents months after he was arrested at an airport in the Balkan nation with fake passports.

The Terraform founder is still awaiting trial for another charge regarding his possible extradition.

Both Seoul and Washington are seeking Kwon's extradition for his suspected role in fraud linked to his company's dramatic collapse last year, which wiped out about $40 billion of investors' money and shook global crypto markets.

Kwon along with a travel companion "are guilty because they used a fake passport" from Costa Rica at the airport, said the court in a statement.

The duo were also carrying Belgium passports under different names in their luggage, according to the court.

Kwon was sentenced to four months in prison, the court said, while his attorney said there were no immediate plans to appeal the ruling.

The verdict comes days after a court extended their stay in custody by six months for the extradition charge.

Kwon, whose real name is Kwon Do-hyung, had been on the run for months after fleeing first South Korea and then Singapore ahead of the company's crash in May last year.

In September, South Korean prosecutors asked Interpol to place him on the red notice list across the agency's 195 member nations and revoked his passport.

Kwon's TerraUSD was marketed as a "stablecoin", which is typically pegged to stable assets such as the US dollar to prevent drastic fluctuations in prices.

Cryptocurrencies have come under increasing scrutiny from regulators after a string of recent controversies, including the high-profile collapse of the exchange FTX.

The digital currency sector has also been hit hard by the demise of US crypto lenders Silvergate and Signature amid a string of banking failures earlier this year that rattled global markets.

Since his arrest in Montenegro, Kwon has been a source of intrigue in the country's divisive political scene.

During the run-up to parliamentary elections this month, controversy swirled after interim Prime Minister Dritan Abazovic and his allies accused Europe Now's leader Milojko Spajic of fostering links with Kwon.

Political analysts have suggested the allegations might have dented Europe Now's performance in the polls, resulting in an ongoing effort to string together a coalition after grabbing approximately a quarter of the votes cast in the contest. - AFP