Montenegro has charged South Korean fugitive and criptocurrency entrepreneur Do Kwon with forgery, and he is expected to face extradition proceedings in court.
Kwon is accused of being a fraudster after his company collapsed in 2022, which erased $40 billion of investor funds and rattled global criptocurrency markets.
Kwon was arrested at the airport in Podgorica, Montenegro's capital, after being discovered traveling with counterfeit documents.
On Friday, Montenegro's police announced that both individuals were charged with document forgery.
Kwon's TerraUSD was promoted as a stable coin that is linked to stable assets such as the U.S. dollar to avoid price fluctuations.
TerraUSD was an algorithmic stable coin, unbacked by assets, and was only pegged to its fluctuating counterpart, Luna LUNA USD.
An official told AFP that Kwon would appear in the Higher Court in Podgorica on Friday for the extradition request hearing.
The Interior ministry of Montenegro confirmed on Thursday that Kwon had been arrested under a South Korean warrant, although the official did not specify the country requesting the extradition.
Seoul has pledged to pursue formal extradition, and the United States has charged Kwon with eight counts including securities fraud and wire fraud, following a lawsuit filed by the US Securities and Exchange Commission.
Kwon allegedly traveled from South Korea to Singapore before the company collapsed in May last year.
South Korean prosecutors requested Interpol to include Kwon in the red notice list across the agency's 195 member nations in September and revoked his passport.
Montenegrin authorities reported on Thursday that Kwon and his companion used falsified Costa Rican travel documents at passport control on a flight to Dubai.
Their luggage contained travel documents from Belgium and South Korea.
Montenegro's interior ministry said that the Belgian documents were forged.