S.Korean crypto fugitive Do Kwon arrested in Montenegro

The fugitive South Korean cryptocurrency mogul Do Kwon, responsible for the more-than-$40 billion crash in the global virtual currency market last year, was arrested in Montenegro and charged with fraud in the US.

“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen, co-founder and CEO of Singapore-based Terraform Labs,” announced Montenegrin Interior Minister Filip Adžić on Thursday through his Twitter account. “The former cryptocurrency king who is behind losses of over $40 billion, has been apprehended at the Podgorica airport with forged documents.”

South Korean police on Friday said fingerprints have confirmed the man arrested at the airport in the capital is Kwon. He was detained as he was about to board a flight to Dubai with a falsified Costa Rican passport.

Han Chang-joon, one of the founding members of Terraform Labs and former CEO of Chai Corporation, was also arrested as he was with Kwon, one of the world’s most wanted fugitives.

FRAUD CHARGES

Kwon was charged by US prosecutors with orchestrating a years-long cryptocurrency fraud. In an indictment on Thursday, prosecutors accused him of eight charges, including defrauding crypto customers by deceiving individuals about aspects of the Terra blockchain. The Securities and Exchange Commission of the US also sued him last month.

South Korean prosecutors, which have been investigating Kwon on charges of violating the Capital Markets Act, were set to discuss the rendition process with Montenegrin authorities to retain him.

Kwon has been on the move overseas since he left for Singapore in April last year, having fled to the United Arab Emirates and other countries

The 31-year-old suspect was a co-founder of Terraform Labs, which created an “algorithmic stablecoin” TerraUSD and the cryptocurrency Luna, the collapse of which caused a multibillion-dollar selloff across the global crypto market.

TerraUSD’s value is pegged to the US dollar, while Luna is the native token for the Terra ecosystem and the reserve currency for TerraUSD.

Luna, once the world’s No. 8 cryptocurrency by market capitalization, tumbled 99.99% in 72 hours in May last year, further dampening investor sentiment, which had already been soured, in the global cryptocurrency market.

Write to Nan-Sae Bin and Jin-Woo Park at binthere@hankyung.com
 
Jongwoo Cheon edited this article.