Subscribe to our newsletter!
- Terraform Labs CEO Do Kwon was arrested in Montenegro after almost a year in hiding following the $40 billion collapse of TerraUSD and Luna tokens.
- Kwon faces charges in South Korea and the United States, including securities fraud, wire fraud, commodities fraud, and conspiracy.
- Montenegro is proceeding with extradition steps as legal proceedings are expected to provide further insights into the events leading to the crypto crash and its aftermath.
Arrest and confirmation
Terraform Labs CEO Do Kwon was arrested in Podgorica, Montenegro after nearly a year in hiding following the collapse of his firm’s $40 billion-worth TerraUSD (UST) and Luna tokens in May 2022. Kwon faces charges in South Korea and the United States.
Montenegro Interior Minister Filip Adzic confirmed Kwon’s arrest via Twitter.
Use of falsified documents and extradition process
Kwon was detained at Podgorica Airport after being caught using falsified documents, including Costa Rican and Belgian passports and a Hawaiian driver’s license, in an attempt to evade capture. South Korea confirmed the suspect in Montenegro was Kwon after fingerprint analysis. Montenegro is now proceeding with extradition steps.
Accomplice and relocation
Another unidentified individual linked to the crypto crash was also arrested. According to Montenegro’s Ministry, Kwon and his accomplice were hiding in Serbia but relocated to Montenegro when South Korean investigators discovered their location and requested Serbian authorities to arrest them.
The aftermath of Terra and Luna collapse: a timeline
Cryptocurrency hedge fund Three Arrows Capital (3AC) also confirmed unprecedented losses due to the Terra collapse.
Former and current Terraform Labs employees were sanctioned with travel bans by the Seoul Southern District Prosecutor’s Office. Also, the hacker collective Anonymous targeted Kwon, pledging to join the investigation into his actions.
US Congress and Regulatory Response
In September 2022, the United States Congress considered a two-year ban on algorithmic stablecoins following the collapse of Terra and its UST stablecoin, while lawmakers studied the coins’ instruments.
In the same month, Interpol issued a red notice for Kwon, urging law enforcement agencies worldwide to find and arrest him.
SEC Charges and Legal Proceedings
By February 2023, the US SEC accused Do Kwon of deceiving investors and committing a multi-billion-dollar fraud involving cryptocurrency assets. Kwon now faces charges of securities fraud, wire fraud, commodities fraud, and conspiracy, according to an indictment.
The arrest of Terraform Labs CEO Do Kwon marks a significant development in the investigation of the TerraUSD and Luna tokens collapse, while the likely legal proceedings to follow will likely shed more light to what really happened to Terra and Luna.
This article is published on BitPinas: Terraform Labs CEO Do Kwon Arrested in Montenegro Following Crypto Collapse
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.