PODGORICA, Montenegro — A trial opened in Montenegro on Thursday against Terraform Labs founder Do Kwon and another citizen of South Korea who are charged in the Balkan country with using forged identification documents, state-owned media reported.

The two have pleaded not guilty and offered 400,000 euros ($437,000) each to be released on bail, the RTCG television report said. The court in Podgorica, Montenegro's capital, hasn't yet decided on the motion.

Do Kwon was arrested in Montenegro in March on an international arrest warrant in connection with a $40 billion crash of the firm’s cryptocurrency that devastated retail investors around the world. Both South Korea and the United States have requested his extradition from Montenegro.

South Korea asked Interpol in September to circulate a “red notice” asking the agency’s 195 member nations to find and apprehend the 31-year-old Kwon. He and the other man were arrested at Montenegro’s Podgorica Airport on March 23 while trying to depart for Dubai using fake Costa Rican passports, authorities have said.

If convicted in Montenegro for using forged documents, the two could face up to five years in prison. That means they could only be extradited after having served the sentence in Montenegro.

The two are believed to had been hiding in Serbia but moved to Montenegro after South Korean investigators tracked their whereabouts and asked Serbian authorities to detain them, the South Korean Justice Ministry said when the arrests were made.

Kwon and five others connected to Terraform are wanted because of allegations of fraud and financial crimes in relation to the implosion of its digital currencies in May 2022.

TerraUSD was designed as a “stablecoin,” a currency which is pegged to stable assets like the U.S. dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg in May. (AP)