Do Kwon, one of the most wanted fugitives in the world and a former digital asset kingpin, has been arrested in Montenegro. Police in the European country arrested Kwon as he attempted to board a flight to Dubai, with South Korean police confirming his identity shortly after.
Kwon is the founder of Terraform Labs, the company behind the Terra ecosystem and its two tokens, LUNA and the UST stablecoin. The spectacular collapse of the two tokens last May cost investors $40 billion and sparked a wider market capitulation. He has been on the run since—although he has denied it—as authorities in his native South Korea, Singapore, Europe, and the U.S. pursued him.
Almost a year since Terra collapsed, Kwon has now been arrested in Montenegro. Filip Adzic, the country’s Minister of Interior, first announced the arrest on social media.
As the Minister of Interior @filip_adzic, announced earlier today, two 🇰🇷 citizens, Kwon Do Hyeong and Hon Chang Joon, were apprehended and brought to the Basic State Prosecutor's Office in Podgorica, on criminal charges for the criminal offense of document forgery under (1/3) pic.twitter.com/iS0rRs2Fwv
— mupCG (@MupCg) March 23, 2023
“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs. The person is suspected of being one of the most wanted fugitives,” Adzic tweeted.
Do Kwon was arrested alongside a second suspect at Podgorica airport as they attempted to board a flight to Dubai. According to the minister, they both possessed forged Costa Rican and Belgian passports.
Shortly after the arrest, the South Korean National Police Agency revealed that they had confirmed the identity of Do Kwon based on his age, name, and nationality on his identity card. The Korean police further crosschecked his fingerprints, and they matched with their records.
“This has been shared with the Seoul Southern District Prosecutors’ Office and Interpol in Montenegro,” an official at the Korean National Police Agency said, as local outlet Yonhap News Agency reported.
Montenegro, US unveil charges against Do Kwon as South Korea seeks extradition
Hours after his arrest was confirmed, the U.S. Department of Justice (DoJ) unveiled charges against the South Korean. U.S. Attorney Damian Williams unveiled an eight-count indictment against Kwon at the U.S. District Court in Manhattan.
DoJ accuses Kwon of two counts each for wire fraud, securities fraud, commodity fraud, and conspiracy to commit fraud.
For conspiracy to commit fraud, Williams argued on the indictment that Kwon made false and misleading statements in a TV interview about LUNA, UST, and the adoption of the Terra blockchain. This interview was broadcast globally, including to investors in the Southern District of New York. Terraform Labs’ social media accounts further amplified these misleading statements to millions of investors globally.
Kwon is also alleged to have contacted a trading firm based in New York to “obtain their assistance in altering the market price of UST.” He compensated this firm by modifying its existing loan with Terraform Labs.
DoJ wants Kwon to forfeit all property that was derived from Terraform Labs. Speaking to one outlet, the department revealed that it would push for Kwon’s extradition to the U.S. to face the charges.
DoJ’s charges come a month after the U.S. SEC sued Kwon for fraud and selling unregistered securities. The SEC also alleged that Terra had worked with a New York trading firm to restore the UST peg, and then went on to tout the effectiveness of the algorithm underlying the stablecoin.
Elsewhere, Montenegro media reports that the country’s authorities are weighing filing charges against Kwon.
The Basic State Prosecution Office is considering charging the Korean for using forged travel documents. If convicted, Kwon could face up to three years for the crime.
In his native South Korea, Kwon faces fraud charges and violating the country’s capital markets laws. Speaking to AFP, a spokesperson for the Seoul Southern District Prosecutors’ Office said it’s working on extraditing Kwon to face the charges.
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