BELGRADE - A court in Montenegro agreed on Friday to release Do Kwon, a cryptocurrency entrepreneur charged in the U.S. with a multibillion-dollar fraud, on bail of 400,000 euros ($440,320), pending a trial on local charges.

Do Kwon, a South Korean national, is the former CEO of South Korea-based Terraform Labs, the company behind the stablecoin TerraUSD that collapsed in May 2022 roiling cryptocurrency markets.

Following his arrest in Montenegro in March, the U.S. District Court in Manhattan made public an eight-count indictment against Do Kwon for securities fraud, wire fraud, commodities fraud and conspiracy.

He was detained with Han Chang-joon, Terraform Labs' former finance officer, who will also be released on bail of 400,000 euros. The pair were charged with forging official documents and a court in Podgorica ordered them to be placed in a 30-day pre-trial detention.

The two defendants will remain under house arrest and be supervised by police, the Basic court in Montenegro's capital Podgorica said in a statement.

"The court ... found that the possibility of losing the posted bail of 400,000 euros each, works sufficiently to dissuade them from any desire to flee," the statement said.

The defendants, who at a hearing on Thursday denied any wrongdoing over the charges pressed by the Montenegrin prosecutor, told the court they have property worth millions and that the bail would be posted by their wives, it said.

Montenegrin police arrested Do Kwon and Chang-joon at Podgorica airport as they tried to board a flight to Dubai.

Police later said they had found doctored Costa Rican passports, a separate set of Belgian passports, laptop computers and other devices in their luggage.

South Korean and U.S. authorities sought extradition of Do Kwon and Chang-joon and the handover of the computers.

($1 = 0.9084 euros)

(Reporting by Aleksandar Vasovic; Editing by Kirsten Donovan)