A disgraced former cryptocurrency boss, Kwon Do-hyeong, who was responsible for the collapse of the TerraUSD and Luna tokens in 2008, which involved a $40 billion (£31.3 billion) collapse in the value of the token, has been sentenced to four months in jail in Montenegro after he was found guilty of forging official documents. In addition, he is facing charges in the United States and South Korea relating to the collapse of the two digital tokens that collapsed last year. 

As a result of the forgery of official documents, including passports and identity cards, Kwon and his business partner Chang-joon Han were found guilty. A month ago, he was arrested at Podgorica Airport in the country's capital while trying to board a plane to Dubai. According to the court statement, 85 days of detention were included in the sentences. 

TerraUSD stable coin was developed by Terraform Labs, and Moon, its sister coin, was developed by Terraform Labs. The vast majority of the money was wiped out of the crypto market in May 2022. Both coins lost more than $40 billion in a matter of days. 

There are also reports that Mr. Kwon, the "crypto crash king," is under the control of US and South Korean authorities in the wake of the collapse of two digital tokens last year. A Montenegrin prisoner has been sentenced to four months in a Montenegro jail after forging biometric data from his passport. This was to escape the collapse of the stablecoin TerraUSD. 

Following his arrest in late March while attempting to board a flight to Dubai, Kwon was charged with forging official documents after he was arrested for trying to board the flight. Passports from Costa Rica and Belgium had been doctored as part of this group.

Han Chang-Joon, another former finance officer at Mr. Kwon's company Terraform Labs, was imprisoned for four months after being found guilty of the same charges. He received the same sentence in the same courtroom. During their first hearing in court in May, Kwon and Han admitted to not being guilty of the charges against them. 

Furthermore, the convicted person has the right to appeal against the verdict within eight days of the date the court notifies them that the verdict has been issued. In 2018, Kwon founded Terraform Labs, which created the Terra USD stablecoin and Luna tokens owned by Terraform Labs. Following the loss of the peg to the US dollar in May 2022, both currencies plummeted. 

Due to the resulting downturn, their market cap of $45 billion (£31.3 billion) was eradicated in just a few hours as a result. In the aftermath of that event, several financial firms exposed to the tokens fell into a tailspin, leading to destabilization. 

Kwon and five other individuals connected to the case were each issued arrest warrants by a South Korean court last year. As a result of the investigation, prosecutors believe Terraform Labs has violated capital market rules since it was registered in Singapore.

Earlier this year, Seoul prosecutors said in December that they believed the crypto boss was hiding in Serbia at the time. Despite multiple claims on Twitter indicating that he wasn't running, Kwon refused to reveal his whereabouts. He cited concerns about his safety as a reason for not disclosing his location. 

Upon Korean authorities' request, Interpol put Kwon on a list designated as a red notice, triggering an international search to determine where Kwon might be. 

There have been allegations that Kwon, who allegedly operated a "multi-billion dollar" scheme involving crypto assets, has been charged with securities fraud by the US Securities and Exchange Commission in February. 

In addition to the US and South Korea, Montenegro has no extradition treaties on its books. In May 2022, Terraform's digital currencies were allegedly imploded, resulting in the arrest of Kwon and five others connected to the company for allegations that they committed fraud and financial crimes. 

As a stablecoin, TerraUSD was developed to prevent drastic price fluctuations due to low volatility. In addition, it was pegged to stable assets such as the U.S. dollar. There is also a substantial drop in market value for holders of TerraUSD and Luna following the plunge far below its $1 peg in May. This erased around $40 billion in market value.