• Terra co-founder Do Kwon is currently in pre-trial detention in Montenegro
  • He allegedly had provided financial backing for a political party in the country
  • The U.S. has already requested for his extradition

Do Kwon, the disgraced co-founder and CEO of the blockchain firm Terraform Labs (TFL), could be a subject of a separate investigation after the prime minister of Montenegro asked prosecutors to look deeper into the issue after the crypto executive admitted to having funded a local political party.

Kwon may have opened a can of worms when he sent letters to outgoing prime minister Dritan Abazovic, the outgoing Justice Minister Marko Kovac and the country's Special State Prosecution, admitting that he had provided financial backing for Europe Now, a political party in the country headed by former Finance Minister Milojko Spajić.

The letter, which the prime minister admitted to having read several days after it was sent, caused Abazovic to seek the help of the Special State Prosecution to conduct an investigation on Kwon's claim, asking the agency to look into the alleged connection between Spajić and the embattled crypto kingpin.

Montenegro "cannot become a breeding ground for global fraudsters, even if they use blockchain or anything else," the outgoing prime minister said during a press conference Wednesday, adding that "it's not good for Montenegro if Spajić had contacts with Do Kwon, because the man is wanted by the U.S. and South Korean authorities."

While Spajić confirmed he knew Kwon, he denied the crypto executive's claim. He said one of his friends and the company he worked for had invested in the Singapore-based blockchain firm.

"Do Kwon is a fraudster who defrauded millions of people, including my friends and the company I worked for, when we invested in this project in early 2018," Spajić shared to a local outlet, admitting having taken "special satisfaction" from reporting the South Korean crypto fugitive to local authorities when Kwon entered Montenegro earlier this year.

The politician also made fun of the issue and downplayed it as some sort of a political maneuver.

"Is there a bigger fuss than losing office for people who have no alternative to politics," Spajić tweeted and suggested it was "best to cancel the elections until the Korean DK is investigated and maybe the United Nations Security Council is involved?"

Kwon and his associate Han Chang-Joon were arrested from Podgorica airport in late March. They are currently in pre-trial detention and awaiting the Montenegro high court's decision on the bail proposal.

Kwon and his associate are accused of traveling using forged documents. The U.S. and his home country South Korea have already requested for his extradition.

Do Kwon is arrested in Podgorica