Montenegrin Prime Minister Milojko Spajic has been revealed as an early investor in the failed cryptocurrency project, Terraform Labs. New information from a court document filed by the United States Securities and Exchange Commission (SEC) shows that Spajic invested $75,000 in Terraform Labs in April 2018, purchasing 750,000 Terra (LUNA) tokens. This investment was made just days before Terraform Labs was officially registered in Singapore. Prior to the disclosure of these court documents, Spajic had denied personal involvement in the project, claiming that it was the Singaporean company Das Capital SG that had invested in Terraform Labs. However, the SEC documents contradict this, listing Spajic as an investor and revealing a contract dated April 17, 2018, establishing his early involvement with the company.
Terraform Labs was responsible for creating the LUNA and TerraUSD (UST) crypto tokens, which reached a market cap of $2 billion before collapsing in May 2022. The collapse of Terra caused significant losses in the crypto ecosystem, wiping out nearly $40 billion from the market and leading to the downfall of several crypto hedge funds that had provided collateral to the firm.
In April 2024, Terraform Labs and co-founder Do Kwon were found guilty of defrauding investors in a civil case brought by the SEC. Kwon had been on the run for several months before being apprehended in March 2023. Last week, a settlement was approved by U.S. District Court Judge Jed Rakoff of the Southern District of New York, requiring Terraform Labs and Kwon to pay a total of $4.5 billion in disgorgement and civil penalties. They will also be permanently banned from engaging in any transactions involving tokens within the Terra ecosystem.
It is worth noting that Kwon, who is currently in custody in Montenegro awaiting extradition, did not attend the trial where the settlement was reached. Terraform Labs, currently operating under Chapter 11 bankruptcy protection, faces the challenge of fulfilling the substantial financial obligations imposed by the settlement. The company’s current CEO, Chris Amani, testified during the trial that Terraform Labs has approximately $150 million in assets. However, it remains uncertain how the company will manage to pay the substantial fines imposed by the settlement.
