Mastermind behind crypto crash requests bail at $440,000

Do Kwon's lawyers sought his bail in Montenegro for around $440,000 after he pleaded not guilty in court.

Police officers escort crypto company Terraform Labs founder Do Kwon, center, in Podgorica, Montenegro, Thursday. [EPA/YONHAP]

Do Kwon posted bail of $440,000 in Montenegro on Friday after pleading not guilty in court. Kwon, 32, the mastermind behind the failed TerraUSD and Luna cryptocurrencies that wiped out around $40 billion in a crash last May, was caught attempting to board a flight to Dubai with a forged passport and other falsified documents in March. Kwon filed the request for bail with a district court in the Balkan country on Thursday. It was granted on Friday. Fellow fugitive Han Chang-joon, the former Terra CFO, who is also charged with possession of a forged passport, was granted bail by the court as well. Kwon recently withdrew $2.9 million worth of cryptocurrency from his private crypto wallet, according to media reports on Friday. The reports speculate the money will be used for court expenses. Kwon and Han will be placed under house arrest in the apartment of the girlfriend of Kwon’s attorney. “Several more court hearings are expected to take place, which will give Kwon time to prepare his strategies against the legal charges he faces in the United States,” Lee Hee-jun, an attorney Kisung law firm, said. Kwon faces eight counts in the United States, including securities fraud, wire fraud, commodities fraud and conspiracy. Authorities there are seeking his extradition. “The United States is the country he would be most afraid to be extradited to as he may be forced to stay until his death,” Lee added. Bernard Lawrence Madoff, a late American fundraiser and financier who was the mastermind of a Ponzi scheme worth almost $65 billion, was sentenced to 150 years in prison, the maximum sentence allowed. He died in prison in April 2021. Korean prosecutors are competing with U.S. prosecutors to extradite Kwon from Montenegro. Interpol issued a Red Notice for Kwon upon the Korean police’s request for assistance in Kwon’s arrest. Kwon’s next court hearing is set for June 16. Kwon is believed to have moved to Montenegro after Korean investigators tracked down his location in Serbia. When asked about his assets, Kwon said he and his wife co-own an apartment in Seoul worth around 3 million euros ($3.2 million). He refused to disclose the exact value of his assets, saying the value fluctuates. His attorney said that Kwon would reveal the total value of his property without the presence of the media, adding that this information could be used against him. His total assets are estimated to be more than he stated. The Korean court froze 233.3 billion won ($175 million) worth of Kwon’s assets, including property at Galleria Forest, one of the most luxurious residences in Seoul, ownership of an officetel building under development in Gangnam, and securities and funds deposited at a broker and bank, according to media reports last week. Following the crypto crash, the Korean government is pushing to pass a bill designed to protect investors. New legislation for crypto on Friday passed the National Policy Committee, a key legislative review subcommittee of the National Assembly. There are 19 proposals that include requiring customer deposits to be placed into segregated deposits and or trust accounts and that customer virtual assets be stored in the same asset and same amount in which they were entrusted. The earliest the bill could be passed at the National Assembly plenary session is May 25.

BY JIN MIN-JI [jin.minji@joongang.co.kr]