Authorities capture fugitive Terra founder

Terra LUNA founder arrest in Montenegro

Do Kwon, a globally sought-after fugitive and former digital asset entrepreneur, has been apprehended in Montenegro. Authorities arrested Kwon as he was attempting to board a flight to Dubai. South Korean law enforcement promptly verified his identity following the arrest.

Causing over $40 billion loses

Kwon is known as the founder of Terraform Labs, the company behind the Terra ecosystem, featuring the LUNA token and the UST stablecoin. The dramatic collapse of these two tokens in May of the previous year inflicted a $40 billion loss on investors and triggered a broader market downturn. Since then, he has been evading authorities—though he has denied it—while facing pursuit by law enforcement agencies in his home country of South Korea, as well as in Singapore, Europe, and the United States.

Almost a year following the collapse of Terra, Kwon has now been apprehended in Montenegro. The country’s Minister of Interior, Filip Adžić, made the initial announcement of the arrest on social media.

“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs. The person is suspected of being one of the most wanted fugitives,” Adžić tweeted.

Nabbed with forged passports

Do Kwon, alongside a second suspect, was apprehended at Podgorica airport as they were preparing to board a flight to Dubai. According to Minister Adzic, both individuals were found in possession of forged Costa Rican and Belgian passports.

Shortly after the arrest, the South Korean National Police Agency confirmed Kwon’s identity based on age, name, and nationality as indicated on his identity card. The Korean authorities also cross-verified his fingerprints, which matched their records.

South Korea confirms

“This has been shared with the Seoul Southern District Prosecutors’ Office and Interpol in Montenegro,” stated an official from the Korean National Police Agency, as reported by local outlet Yonhap News Agency.

Hours after confirming his arrest, the U.S. Department of Justice (DoJ) revealed charges against the South Korean fugitive. U.S. Attorney Damian Williams presented an eight-count indictment against Kwon in the U.S. District Court in Manhattan.

The DoJ has accused Kwon of two counts each for wire fraud, securities fraud, commodity fraud, and conspiracy to commit fraud.

Charges against Kwon

Regarding the conspiracy to commit fraud charge, the indictment alleges that Kwon made false and misleading statements about LUNA, UST, and the adoption of the Terra blockchain during a televised interview. This interview was broadcast worldwide, including to investors in the Southern District of New York. Terraform Labs’ social media accounts further amplified these misleading statements to millions of global investors.

Kwon is also accused of contacting a New York-based trading firm to seek assistance in manipulating the market price of UST. In exchange, he offered to modify the firm’s existing loan with Terraform Labs.

The DoJ is seeking the forfeiture of all assets derived from Terraform Labs. The department confirmed its intention to pursue Kwon’s extradition to the United States to face these charges.

The charges from the DoJ come one month after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Kwon for fraud and the sale of unregistered securities. The SEC also alleged that Terra had collaborated with a New York trading firm to stabilize the UST peg and subsequently promoted the effectiveness of the stablecoin’s underlying algorithm.

Meanwhile, local authorities are also contemplating charging Kwon.

The Basic State Prosecution Office is weighing charges against Kwon for using counterfeit travel documents. If convicted, he could face up to three years in prison for this offense.

In his home country of South Korea, Kwon faces charges of fraud and violating capital markets laws. A spokesperson for the Seoul Southern District Prosecutors’ Office confirmed that efforts are underway to extradite Kwon for prosecution.

Leave a Reply

Your email address will not be published. Required fields are marked *