Montenegro PM falls victim to failed Terra Luna project: Report

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As a researcher with extensive experience in the crypto industry, I find this latest development between Montenegro Prime Minister Milojko Spajic and Terraform Labs’ Do Kwon quite intriguing. The revelation that Spajic invested in Terraform Labs years before its collapse has added an unexpected twist to the ongoing saga surrounding Kwon and the failed crypto project.

Newly disclosed court documents in the United States suggest that Montenegrin Prime Minister Milojko Spajic personally funded Terraform Labs, the crypto firm founded by controversial figure Do Kwon, several years prior to its eventual downfall.

Montenegro PM invested in Terraform Labs

As a crypto investor following developments closely, I’ve come across intriguing news from Bloomberg regarding an individual named Spajic. Based on court documents they’ve cited, it appears that Spajic made investments in Terraform Labs – the innovative team behind the now-failed Terra Luna coin project.

Prior to taking up the role of prime minister, Spajic, who is a successful crypto entrepreneur, put $75,000 into Terraform Labs back in 2018. This investment resulted in him owning approximately 7.5 million LUNA tokens, each worth just 10 cents at the time.

As a successful crypto investor, I once held LUNA tokens when their value reached an astounding high of $199 per token. This peak valuation meant my initial investment could have grown into a substantial fortune worth over $140 million. Realizing the potential risks and recognizing profits, I wisely chose to sell some of my holdings before the market took a downturn.

The link between Do Kwon’s hiding in Montenegro and his efforts to avoid legal action leaves open some intriguing inquiries. Kwon, who is the founder of Terraform Labs, was captured in Montenegro in March 2023. He was found carrying a bogus passport and now confronts extradition requests from both the United States and South Korea.

This link between Kwon and Terraform Labs carries substantial consequences, enriching the intricacy of the unfolding saga.

As a researcher looking into the LUNA crash, I’ve noticed that Spajić has not previously identified himself as a victim of the incident. Instead, earlier statements suggested that a company he had ties to experienced a $75,000 fraud, rather than implying that his personal investment was affected.

As a crypto investor following the developments between Kwon and Terraform Labs closely, the recent disclosure about Spajic’s involvement in the situation adds an intriguing layer of complexity to the ongoing saga. Although it doesn’t necessarily imply any wrongdoing on Spajic’s part, this connection significantly affects both the legal and financial implications of the case. The eventual outcome of the legal proceedings against Kwon remains uncertain as a result.

The failure of Terraform Labs, the innovator behind the algorithmic UST stablecoin, resulted in approximately $40 billion in cryptocurrency losses for investors.

Simultaneously, Terraform Labs and Kwon have come to terms with the SEC over a $4.47 billion penalty. Under the terms of the deal, the business will cease its activities, while Kwon faces a lifelong prohibition from the crypto sector.

Crypto bankruptcies and investor risks

Lately, several notable cryptocurrency businesses have sought bankruptcy protection, highlighting the unpredictability and intricate legal issues that are part and parcel of the crypto market.

  • In July 2022, Voyager Digital, a crypto lender and broker, filed for bankruptcy following the collapse of the TerraUSD stablecoin and its associated cryptocurrency Luna. The company had halted customer withdrawals just before filing, leaving many investors unable to access their funds.
  • Similarly, Celsius Network, another crypto lender, filed for bankruptcy around the same time. Financial troubles exacerbated by the TerraUSD and Luna collapse led Celsius to suspend withdrawals for hundreds of thousands of customers in June 2022. The company has since faced fraud investigations and allegations of mishandling customer accounts.
  • Also in July 2022, Three Arrows Capital, a crypto hedge fund known for its aggressive investment strategy, also contributed to the broader market downturn. The fund’s bankruptcy led to significant financial losses for its investors.
  • In November 2022, BlockFi filed for bankruptcy, citing a liquidity crisis linked to its reliance on a $400 million credit line from the now-bankrupt FTX exchange. However, BlockFi emerged from bankruptcy in late October 2023 and is now pursuing assets it claims are owed by FTX and the defunct crypto hedge fund Three Arrows Capital.
  • The collapse of FTX in November 2022 dealt a significant blow to the crypto industry. As one of the largest and most well-known crypto exchanges, FTX’s bankruptcy proceedings have resulted in over $500 million in fees for its lawyers and advisers, with total costs soaring to $700 million.
  • In February 2023, crypto mining company Core Scientific also filed for bankruptcy, struggling with declining cryptocurrency prices and rising energy costs. The company is currently reorganizing its debts and restructuring operations.

As a researcher studying the crypto industry, I’ve come across numerous bankruptcy cases that have brought to light the intricate legal challenges in this field. These issues have sparked concerns regarding the absence of comprehensive regulations and transparency, leaving investors potentially exposed to significant risks.

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2024-06-22 20:52