New US court filings have revealed that Montenegrin Prime Minister Milojko Spajic personally invested in fugitive Do Kwon's Terraform Labs cryptocurrency project years before the company's collapse.
Prime Minister of Montenegro invests in Terraform Labs
According to Bloomberg, citing court records, Spajic invested in Terraform Labs, the company behind the failed Terra Luna coin.
Before assuming his position as Prime Minister, Spajic â a crypto entrepreneur â invested $75,000 in Terraform Labs in 2018. He purchased 750,000 LUNA tokens at 10 cents each.Â
At its peak, LUNA's value skyrocketed to $199 per token, potentially making Spajic's investment worth more than $140 million. He may have sold some of his shares before the crash, profiting from his investment.
This connection raises the question of why Do Kwon, founder of Terraform Labs, sought refuge in Montenegro while trying to avoid prosecution. Kwon, who has been detained in Montenegro since March 2023, was arrested on a fake passport and now faces extradition requests from both the United States and South Korea.
The implications of this connection are significant, adding further complexity to the ongoing drama surrounding Kwon and Terraform Labs.Â
SpajiÄ has not previously confirmed that he was a victim of the LUNA accident. Previous statements indicated that a company he was associated with was defrauded of $75,000 rather than his personal investments being affected.
While this revelation doesn't definitively prove any wrongdoing on Spajic's part, it certainly adds a fascinating dimension to the ongoing saga involving Kwon and Terraform Labs. The potential impact on legal proceedings against Kwon remains to be seen. However, this connection has important implications for the legal and financial aspects of the case.
The collapse of Terraform Labs, creator of the UST stablecoin algorithm, caused cryptocurrency holders to lose nearly $40 billion.
In parallel, Terraform Labs and Kwon reached a settlement with the SEC for a total of $4.47 billion. As part of the settlement, the company will suspend operations and Kwon will receive a permanent ban from the cryptocurrency industry.
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Cryptocurrency bankruptcy and investor risks
In recent years, a series of prominent cryptocurrency companies have filed for bankruptcy, highlighting the volatility and legal complexity inherent in the cryptocurrency ecosystem.Â
In July 2022, Voyager Digital, a cryptocurrency brokerage and lending company, filed for bankruptcy following the collapse of stablecoin TerraUSD and related cryptocurrency Luna. The company paused customer withdrawals shortly before the filing, leaving many investors unable to access their funds.
Similarly, Celc Network, another cryptocurrency lending company, filed for bankruptcy around the same time. Financial troubles exacerbated by the collapse of TerraUSD and Luna prompted Celcius to suspend withdrawals for hundreds of thousands of customers in June 2022. The company has since faced fraud investigations and allegations of mishandling of customer accounts.
Also in July 2022, Three Arrows Capital, a cryptocurrency hedge fund known for its aggressive investment strategy, also contributed to the overall market downturn. The fund's bankruptcy resulted in significant financial losses for investors.
In November 2022, BlockFi filed for bankruptcy, citing a liquidity crisis related to its reliance on a $400 million credit line from now-bankrupt exchange FTX. However, BlockFi emerged from bankruptcy in late October 2023 and is now pursuing assets it claims belong to FTX and defunct crypto hedge fund Three Arrows Capital.
The collapse of FTX in November 2022 dealt a huge blow to the cryptocurrency industry. As one of the largest and most famous cryptocurrency exchanges, FTX's bankruptcy proceedings have cost its lawyers and advisors more than $500 million in fees, with total costs reaching up to $700 million. .
In February 2023, cryptocurrency mining company Core Scientific also filed for bankruptcy, struggling with falling cryptocurrency prices and rising energy costs. The company is currently restructuring debt and restructuring operations.
These bankruptcies have highlighted the cryptocurrency industry's complex legal issues, raising concerns about the lack of regulation and transparency as well as the risks facing investors. face.Â
Read more: FTX has more billions than needed to repay bankruptcy victims
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