Collapsed Terraform Labs leaves Montenegro Prime Minister Milojko Spajić with huge losses

Montenegrin Prime Minister Milojko Spajić has been embroiled in controversy recently over his early investment in defunct cryptocurrency company Terraform Labs.

According to U.S. Securities and Exchange Commission (SEC) court documents, Spajić played a major role in the company’s early funding but suffered huge losses when the Terra Luna token collapsed.

Investment details and possible losses

Spajić reported to Terraform in April 2018 Labs invested $75,000 and became the company’s 16th investor, receiving 750,000 Luna tokens at a cost of $0.10 per token. At the Luna Token’s peak, the total value of these tokens was as high as $90 million.

SEC filings show a total of 14 individuals and 10 companies were identified as Terraform Labs contributed approximately $13.75 million to initial development and research.

In the spring of 2022, the value of the Terra Luna token plummeted from a high of $119 to nearly zero, causing global investors to lose more than $40 billion. Spajić claims that his employer, not himself, was defrauded of the investment.

At the same time, a financial expert pointed out in an interview with "Vijesti" that if Spajić kept the tokens at the peak of the market, he might face a loss of nearly 90 million US dollars.

Regulatory issues and legal disputes

Spajić failed to report his Luna token ownership to the Anti-Corruption Bureau, instead claiming to own €150,000 worth of Bitcoin in reports in 2020 and 2021. In a subsequent report, he listed various cryptocurrencies but did not specify their values.

It is unclear whether Spajić is asking Terraform Labs and its co-founder Do Kwon to return investments or compensate for lost profits, and whether he is suing the company and Kwon for fraud. Meanwhile, Terraform Labs and Kwon were held accountable for defrauding investors, and by then the SEC had reached a settlement requiring the company to pay $4.37 billion in penalties and interest, with Kwon injecting $200 million into an investor compensation fund.

Meanwhile, Do Kwon was found guilty and sentenced for using a forged passport and is currently in Montenegro awaiting extradition to the United States or South Korea. Terraform Labs has agreed to a $4.47 billion settlement with the SEC, in which the company will cease operations and Kwon will be permanently banned from the crypto industry.

Conclusion

Spajić’s investment and its consequences not only affected him personally, but also Terraform’s The legal dispute between Labs and Kwon in Montenegro has added a new twist.

Along with the bankruptcy and liquidation of assets of Terraform Labs, as well as the SEC’s massive settlement demand, this incident highlights the high risks and regulatory challenges of the cryptocurrency market.

At the same time, this also reminds investors to be cautious when investing in cryptocurrencies and comply with relevant regulatory regulations.

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