News Update


Do Kwon: Montenegro arrests fugitive ‘cryptocrash’ boss

Do Kwon, the fugitive cryptocurrency executive responsible for the $40 billion (£32.5 billion) collapse of the terraUSD and Luna tokens, has been apprehended in Montenegro, according to South Korean police.

US prosecutors have since charged him with fraud.

Earlier this year, US regulators accused Mr Kwon and his company Terraform Labs of “orchestrating a multi-billion dollar crypto asset securities fraud.”

The company did not immediately respond to a BBC request for comment.

Last September, South Korean authorities issued an arrest warrant for Mr. Kwon, believing Terraform Labs had violated capital market rules.

Because the two countries do not have an extradition treaty, they assumed he was in Serbia and sent officials to Belgrade to negotiate.

Mr Kwon has previously denied being in hiding but has never revealed his location.

Montenegro’s interior minister, Filip Adzic, tweeted that “one of the world’s most wanted fugitives” had been apprehended at Podgorica’s airport.

Mr Adzic went on to say that the suspect was allegedly traveling under a false name and with fake documents. Authorities were awaiting official confirmation of the man’s identity, he said.

On Friday, South Korean police confirmed that the suspect in Montenegro was Mr Kwon after his fingerprints matched official records.

US prosecutors have separately charged Mr Kwon with fraud.

According to an indictment unsealed Thursday at the US District Court in Manhattan, he faces charges of securities fraud, wire fraud, commodities fraud, and conspiracy. Mr Kwon’s lawyer did not immediately respond to requests for comment from the BBC.

Montenegro does not have extradition treaties with the United States or South Korea.

In February, US financial regulators said Mr Kwon and Singapore-based Terraform Labs “failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD.”

They allegedly made repeated claims that the tokens’ value would rise and misled investors about TerraUSD’s stability.

However, the value of the token and its associated Luna cryptocurrency fell close to zero last May.

It triggered a sell-off in major cryptocurrencies such as Bitcoin, Ethereum, and Tether. As a result, the term “cryptocrash” became popular online.

“I am heartbroken about the pain my invention has caused all of you,” Mr Kwon said at the time.

According to blockchain analytics firm Elliptic, investors in TerraUSD and Luna lost an estimated $42 billion worldwide.


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