Montenegro says it has arrested Korean crypto fugitive Do Kwon
Fugitive South Korean cryptocurrency entrepreneur Do Kwon, accused of orchestrating the multibillion-dollar fraud that rocked global crypto markets last year, has been arrested in Montenegro along with another South Korean national, the Interior Ministry said Thursday.
“Kwon Do-hyung and Han Chang-joon were arrested and brought to the public prosecutor’s office in Podgorica for the criminal act of document forgery,” said a statement from the Ministry of the Interior.
During passport control for a flight to Dubai, they used two forged travel documents from Costa Rica, which were also established by Interpol checks, it said.
Inspection of their luggage also found travel documents from Belgium and South Korea while Interpol checks discovered that Belgian documents were forged, the ministry added.
The police seized three portable devices and five mobile phones from them.
Their entry into Montenegro has not been registered, the ministry said.
South Korea has issued an arrest warrant for them for the offense of “criminal association,” it added.
Earlier on Thursday, Montenegrin Interior Minister Filip Adzic tweeted that police had arrested at Podgorica airport 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.”
South Korea asked Interpol in September to circulate a “red notice” for the 31-year-old across the agency’s 195 member nations.
Kwon and five others linked to Terraform are wanted for fraud and the implosion of their digital currencies in May 2022.
TerraUSD was designed as a “stablecoin”, which is pegged to stable assets like the dollar to prevent drastic price fluctuations.
However, around $40 billion in market capitalization was wiped out for holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged well below the $1 peg last May.
Kwon is accused of “orchestrating a multi-billion dollar securities fraud for crypto assets,” according to the US Securities and Exchange Commission.
– Death Spiral –
Stablecoins are designed to have a relatively fixed price and are usually tied to a real commodity or currency.
Many investors lost their savings when Luna and Terra went into a death spiral, and South Korean authorities had opened several criminal investigations into the crash.
Cryptocurrencies have come under increasing scrutiny from regulators around the world following a series of recent controversies, including the high-profile collapse of crypto exchange FTX.
FTX and its sister trading house Alameda Research filed for bankruptcy late last year, dissolving a virtual trading business that had been valued by the market at $32 billion.
The fall of FTX has cast great doubt on the long-term viability of cryptocurrency and increased stress on additional platforms and entities that drove the success of Bitcoin and other currencies.
Adding to the mounting suffering, the digital currency sector has also been hit hard by the demise of US crypto lenders Silvergate and Signature amid a series of bank failures that have rattled global markets and sparked fears of future financial turmoil.
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