US court filings reveal Montenegro’s Prime Minister Milojko Spajic personally invested $75,000 in Terraform Labs crypto holdings in 2018, long before the company’s algorithmic stablecoin TerraUSD and reserve asset Luna collapsed in 2022, wiping out tens of billions of dollars worth of market capitalisation.

The filings show that Spajic was listed among the early investors of Terraform, when the company was raising funds to develop its crypto project.

Bloomberg noted that the investment raised questions about why Singapore-based Terraform’s founder Do Kwon had fled to Montenegro, a tiny Balkan country of fewer than a million people.

Spajic’s LinkedIn page shows that he worked in Singapore’s financial industry from 2014 to late 2020 — a period during which the investment was made — before returning to Montenegro to become finance minister.

Montenegro newspaper Vijesti first broke the story, reporting that Spajic’s Terraform holdings had increased to $90 million in value at one point. Vijesti is printed in Croatian and the article was machine translated.

Spajic had previously said that the company where he worked had made the investment, and not him personally, according to Vijesti.

The newspaper said Spajic had declined to comment on the story.

Montenegro’s political opposition has demanded Spajic’s resignation.

Criminal litigation

Terraform Labs, which filed for Chapter 11 bankruptcy earlier this year, must pay the US Securities and Exchange Commission $4.47 billion in penalties to resolve a civil lawsuit, DL News reported earlier this month.

Kwon, also the target of ongoing criminal litigation from the US Justice Department, must pay another $204 million to the SEC.

The agreement follows a jury verdict in April that found Terraform and Kwon liable for fraud.

The documents that list the initial Terraform investors in a table, including Prajik, were compiled and submitted to the court by SEC Assistant Chief Accountant Avron Elbaum.

In 2023, Kwon was sentenced to four months in prison in Montenegro after he was apprehended at the airport in the capital Podgorica using a fake Costa Rican passport as he attempted to leave for Dubai.

He was released from prison in March on bail in Montenegro, and since then has been caught up in competing extradition demands from both the US and South Korea, his home country.