The creator of failed cryptocurrency Terra (LUNA), South Korean Do Kwon, wanted on charges of orchestrating cryptocurrency fraud, has been arrested in Montenegro, the country’s interior minister Filip Adzic announced.
“Montenegrin police have arrested a suspect considered one of the world’s most wanted fugitives, South Korean Do Kwon, co-founder and CEO of Terraform Labs,” the minister said on his Twitter account.
The South Korean suspect was detained at the airport in Montenegro’s capital, Podgorica, in possession of “forged documents”, pending official confirmation of his identity.
However, the South Korean authorities have announced that they will demand the businessman’s extradition.
“South Korean prosecutors will take steps to repatriate Kwon Do-hyung. We are working on the process,” Seoul Southern District Office spokesman Kim Hee-kyung told AFP.
In September, South Korea’s prosecutor asked Interpol to put his name on the red list of wanted persons and also revoked his passport.
The US Securities Commission (SEC) accused Do Kwon in mid-February of “orchestrating a multi-billion dollar cryptocurrency fraud”, and Interpol issued a notice in September to track him down.
The collapse of Terraform Labs and the fall of the Terra cryptocurrency in 2022 led investors to losses of nearly $40 billion and shook the cryptocurrency market.
According to the SEC filing, Terraform and Do Kwon “repeatedly misled investors” by claiming that a popular Korean payment app used the technology behind Terra to settle transactions that would increase Luna’s value.
The Terraform Labs system “was simply a bloated pseudo-algorithmic + stablecoin + fraud whose price was controlled by the defendants rather than any computer code,” explained senior SEC official Gurbir Grewal.
In April 2022, the value of the Earth reached an all-time high. At the time, it was the fourth-largest stablecoin and the tenth-leading cryptocurrency by market capitalization, according to CoinMarketCap.
A month later, Terra had lost more than half its value in just 24 hours, sparking a wave of panic, and quickly plummeted to zero, hitting the savings of many small investors.
Since then, South Korean authorities have opened several criminal investigations into the matter.
Source: DN
