The high court of Montenegro has revoked its decision to grant bail to Terraform Labs chief executive officer Kwon Do-hyeong and former chief financial officer Han Chang-joon. Both Kwon and Han will remain in jail, while the next hearing for the two South Korean nationals is expected to take place on June 16.

The two were arrested at Podgorica airport on March 23 for allegedly attempting to fly out of the country using fake passports. Kwon, a South Korean national, was subject to an Interpol Red Notice that requested law enforcement agencies to detain him.

Kwon and Han denied the charges of forging travel documents, while their attorneys proposed that they be given bail at 400,000 euros (US$437,000) each. The local court granted the request on May 12. However, Montenegrin prosecutors filed an appeal against the court decision less than a week later.

The revocation of bail for Kwon and Han is a significant development in the case against them. It suggests that the Montenegrin authorities believe there is a strong case against them and that they are a flight risk. The next hearing in the case is scheduled for June 16.

Terraform‘s algorithmic stablecoin and cryptocurrency project Terra-Luna collapsed in May 2022, wiping out over US$40 billion in market capitalization. Kwon is wanted in the U.S. and South Korea, where prosecutors accuse him of fraud, securities law violations, and several other charges related to the collapse.

Kwon has repeatedly denied all the allegations against him. He admits that mistakes were made in the Terra-Luna crypto project managed by his company Terraform Labs. However, he argues there was never any intent to deceive investors.