Do Kwon, the fugitive crypto boss behind the $40bn collapse of the terraUSD and Luna tokens, arrested

Interpol confirms arrest of crypto fugitive Do Kwon in Montenegro

Do Kwon, the co-founder and CEO of Terraform Labs, a blockchain platform behind the TerraUSD stablecoin and its sister coin Luna, was arrested in Montenegro on Thursday, according to Interpol.

Kwon is wanted in South Korea and the United States on charges of fraud and securities violations related to the collapse of his crypto company in May 2022.

TerraUSD and Luna were among the most popular cryptocurrencies in the market until they lost their value within days, triggering a massive sell-off that wiped out $40 billion of investor wealth and sparked a “crypto winter” that lasted for months.

US regulators accused Kwon and his company of “orchestrating a multi-billion dollar crypto asset securities fraud” by misleading investors about the stability and profitability of their tokens.

Kwon, a South Korean national based in Singapore, had been on the run since September 2022, when a South Korean court issued an arrest warrant for him. He had denied any wrongdoing and claimed that he was not hiding but refused to disclose his location due to security concerns. He had also said that the charges against him were “politically motivated”.

Kwon was arrested at Podgorica airport with counterfeit documentation and was identified through a fingerprint match, Interpol’s national central bureau in Seoul told CNN on Friday. He was traveling under a false name and was allegedly trying to flee to Dubai, according to Montenegrin Internal Affairs Minister Filip Adžić, who announced the arrest on social media.

US prosecutors also indicted Kwon on Thursday on securities fraud, wire fraud, commodities fraud, and conspiracy charges. He faces up to 20 years in prison if convicted. A lawyer for Kwon did not immediately respond to requests for comment.

Montenegro does not have extradition treaties with the US or South Korea, so it is unclear what will happen to Kwon next. His arrest is a major breakthrough for the authorities who have been pursuing him for months and a relief for the investors who lost their money in his crypto scheme.