A man believed to be Terraform Labs co-founder Do Kwon, who chaired a over $40 billion ($60 billion) cryptocurrency implosion last year, he was detained in Montenegro just over a month after the US Securities and Exchange Commission indicted him for fraud.
The 31-year-old man was detained at Podgorica airport with forged documents and is wanted by authorities in South Korea, the United States and Singapore, Montenegro’s Interior Minister Filip Adzic said in a tweet on Thursday. A police spokesman in Podgorica said authorities are working to confirm that the person arrested is Kwon.
Do Kwon’s whereabouts have been the source of ongoing speculation since South Korean authorities issued an arrest warrant in September on charges that included violations of capital markets law.Credit:Bloomberg
Prosecutors in his native South Korea allege he violated capital market law and have been seeking his arrest since mid-September.
Kwon found himself at the center of one of the most damaging episodes in the cryptocurrency industry last May, when the TerraUSD stablecoin he helped create and its sister token Luna suddenly cratered. That event set off a chain of failures in the digital asset space that culminated in the bankruptcy of Sam Bankman-Fried’s FTX six months later. Suits from hedge fund Three Arrows Capital to lender Celsius Network collapsed en route.
Kwon did not immediately respond to efforts to contact him through Telegram messages and emails. Terraform Labs representatives did not respond to a request for comment. The businessman has previously denied wrongdoing and that he was a fugitive from justice. Prosecutors and South Korean police could not immediately be reached after normal hours.
Charging
A successor to the Luna token fell more than 7 percent after news of the arrest before recouping some losses, according to CoinGecko.
Kwon’s whereabouts have been the source of ongoing speculation since South Korean authorities issued an arrest warrant in September on charges that included violations of capital markets law. The country stripped him of his passport and said he is the subject of an Interpol red notice.
In February, the SEC turned on Kwon when it alleged in federal court that Terraform Labs and Kwon offered and sold unregistered securities, including stablecoin, and carried out a scheme that wiped out at least $40 billion worth of market.
