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Do Kwon, Wanted in $40B Crypto Crash - Arrested

Do Kwon, co-founder and CEO of Terraform Labs was detained and arrested in Montenegro on Thursday.

Credit: Woohae Cho/Bloomberg/Getty Images

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Police in Montenegro have arrested the former Terraform Labs founder Do Kwon, who is wanted in the U.S. and South Korea in connection with a $40 billion crash of his company which devastated the cryptocurrency market around the world.

On Twitter, Interior Minister Filip Adzic tweeted:

"Montenegrin police arrested an individual who is believed to be one of the most wanted fugitives, South Korean citizen Do Kwon,"

Detained in Podgorica, Montenegro

The 31-year-old, Kwon and a friend Hon Chang Joonhis were found and detained in Podgorica, Montenegro while trying to fly to Dubai using falsified Costa Rican traveling documents, according to Montenegro’s Interior Ministry in a statement Thursday.

In addition to the falsified Costa Rican passport, the two were also found with Belgian and South Korean traveling documents. According to Interpol, the Belgian papers were also falsified.

Police also took three laptops and five mobile phones from the pair, according to a statement by the ministry.

Source: REUTERS/Stevo Vasiljevic

Where was Kwon hiding?

The whereabouts of Kwon have been the source of speculation since early September when authorities in South Korea issued a warrant for his arrest. South Korea subsequently stripped him of his passport and said he was the subject of an Interpol red notice.

Kwon found himself at the center of one of the crypto's most devastating events last May when the TerraUSD stablecoin and its sister token Luna suddenly crashed.

Kwon has been charged with fraud and breaches of South Korea’s capital markets law.

The entrepreneur has previously denied wrongdoing and that he was a fugitive from justice. He has also repeatedly claimed on Twitter that he was not “on the run,” but refused to disclose his whereabouts due to worries about his personal security.

New Charges & Extridiction Against Kwon

Upon hearing the word of his capture, the DOJ has recently charged Kwon with eight counts of fraud.

This is in addition to the SEC which has already filed a lawsuit against Kwon for allegedly selling unregistered securities. South Korean prosecutors are also looking to charge Kwon with running a Ponzi scheme.

Kwon is being charged in Montenegro with forgery and will be brought to court regarding his extradition hearing. It is still unclear whether he will be sent to South Korea or the United States for his extradition.