Montenegro PM Milojko Spajic Revealed as Early Investor in Defunct Crypto Project Terraform Labs

This revelation emerged from court documents dated April 2024. According to these documents, filed by the United States Securities and Exchange Commission (SEC)

Montenegro's Prime Minister Milojko Spajic was revealed to be an early investor in the now-defunct crypto project Terraform Labs, according to court documents dated April 2024.

The United States Securities and Exchange Commission (SEC) filings show that Spajic invested $75,000 in April 2018, acquiring 750,000 Terra (LUNA) tokens. This transaction occurred a few days before Terraform Labs was officially registered in Singapore on April 23, 2018.

Previously, Spajic distanced himself from the beleaguered crypto project, attributing any investments to Das Capital SG, a Singaporean company where he was employed from 2017 until 2020.

However, the SEC's findings explicitly list Spajic as an investor, citing a contract dated April 17, 2018, that highlights his early involvement with Terraform Labs. The company created the LUNA and TerraUSD (UST) crypto tokens, which once had a combined market capitalization of about $2 billion.

But the dramatic collapse of Terra in May 2022 erased nearly $40 billion from the market and caused the failure of several crypto hedge funds that had provided collateral to Terraform Labs.

The SEC's legal actions against Terraform Labs culminated in April 2024, when a jury found the company and its co-founder, Do Kwon, guilty of defrauding investors. Kwon, who had evaded international law enforcement for months, was captured in March 2023.

The association of Spajic with Terraform Labs, as detailed in the SEC documents, raises serious concerns about his transparency and the ethical dimensions of his involvement with such a controversial venture. This connection poses a significant threat to his credibility and may diminish public trust in his leadership.

The collapse of Terraform Labs not only led to a significant financial loss in the cryptocurrency ecosystem but also had far-reaching consequences. The downfall of Terra wiped out nearly $40 billion from the market, impacting numerous investors and firms that had collateral ties with the company.

In April 2024, a jury found Terraform Labs and its co-founder Do Kwon guilty of defrauding investors in a civil case brought by the SEC. Kwon had been on the run for several months before being apprehended by international law enforcement agencies in March 2023.

Massive Settlement and Financial Challenges

Adding to the complexity of this case, last week, Judge Jed Rakoff of the Southern District of New York approved a massive $4.5 billion settlement in the civil case against Terraform Labs and Kwon.

The settlement, which follows an initial SEC proposal of $5.3 billion, includes disgorgement and civil penalties and imposes a permanent ban on Terraform Labs and Kwon from engaging in transactions involving “crypto asset securities,” particularly those related to the Terra ecosystem.

The agreement was reached after Terraform Labs contested the SEC's initial penalty, advocating for a considerably lower fine of $1 million. Both Kwon, who is detained in Montenegro pending extradition, and legal representatives for Terraform Labs consented to the revised $4.5 billion settlement proposal on June 6.

Despite operating under Chapter 11 bankruptcy protection, Terraform Labs now confronts the daunting task of fulfilling its financial obligations from the settlement.

The trial testimony by the company's current CEO, Chris Amani, revealed that Terraform Labs holds about $150 million in assets, casting doubt on how the company will manage to cover the hefty fines.

Political Repercussions for Spajic

The new documents linking Spajic directly to Terraform Labs could have severe political repercussions. His failure to disclose this investment might lead to questions about his transparency and the ethical implications of his involvement in such a controversial project.

As Prime Minister, Spajic's direct investment in a failed crypto project could undermine public trust and his political standing. This development, particularly his early and undisclosed financial ties to Terraform Labs, poses a significant threat to his credibility and might prompt closer scrutiny of his financial decisions.

The intertwining of Spajic's financial history with Terraform Labs highlights the broader implications of the crypto project's collapse, which continues to reverberate through both financial and political spheres.

The impact on public perception and the potential political fallout underscore the gravity of these revelations and their potential to influence Montenegro's political landscape significantly.

News source：https://www.kdj.com/cryptocurrencies-news/articles/montenegro-pm-milojko-spajic-revealed-investor-defunct-crypto-project-terraform-labs.html

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