Fugitive ‘cryptocurrency king’ behind 2022’s $40B crash arrested fleeing Montenegro with fake documents

Both the South Korean and US authorities want a word with Do Kwon.

Terraform Labs CEO Do Kwon

Do Kwon, former crypto darling and now fugitive, has been arrested in Montenegro. Kwon was the driving force behind and public face for the TerraUSD stablecoin and the Luna cryptocurrency, the collapse of which saw an estimated $40 billion in value disappear overnight. Late last year South Korea issued an arrest warrant for Kwon (opens in new tab), who swiftly went into hiding while publicly denying he was in hiding. I guess that’s one good use for Twitter.

Kwon’s arrest was announced by Montenegro’s interior minister Filip Adzic, also on Twitter, who said (opens in new tab) (via machine translation) “Montenegrin police have detained a person suspected of being one of the world’s most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs.

“The former ‘cryptocurrency king’, who is behind losses of more than 40 billion dollars, was detained at the Podgorica airport with falsified documents, and South Korea, the USA and Singapore are demanding [his extradition].”

Kwon was attempting to get to Dubai using a fake Costa Rican passport, and was also in possession of a fake Belgian passport. Adzic said the authorities were waiting for official confirmation of Kwon’s identity, and South Korean police have subsequently verified that the arrested man’s fingerprints match their records. As well as being sought-after by South Korea, Kwon is also wanted in Singapore, and in February US prosecutors announced they would charge him with fraud: Specifically securities fraud, wire fraud, commodities fraud and conspiracy, per the indictment.

It had been thought that Do Kwon was in Serbia, which shares a border with Montenegro, and the South Koreans had even gone as far as sending officials to Belgrade in order to prepare the ground for extradition (as there’s currently no extradition treaty between the countries). Montenegro does not have extradition treaties with South Korea or the US but that only means it’ll take a little longer before Kwon’s cuffed-up on a plane: Where he’s going to face trial is the bigger question.

Oh well. I suppose if you’re going to, in the words of the US prosecutors, “orchestrate a multi-billion dollar crypto asset securities fraud” then the fake passports and secret identities must have seemed like a good idea at the time. Kwon has been silent on social media since February 1, and his lawyers are yet to comment on his arrest. 

The collapse of TerraUSD and Luna saw the value of both plunge to near-zero in May 2022, and triggered a huge wave of crypto selling. It got big enough to affect the crypto sector’s poster boys including Bitcoin and Ethereum, and ever since this point we’ve seen one crypto disaster after another (the most recent being the collapse of Silicon Valley Bank (opens in new tab)). Unfortunately for Do Kwon, it’ll soon be time to pay the piper.

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