Montenegro says it arrested Korean fugitive Crypto Do Kwon

Representative image. Wikimedia Commons

Podgorica: Suspected South Korean cryptocurrency entrepreneur Do Kwon, accused of orchestrating a multi-billion dollar fraud that rocked global crypto markets last year, has been arrested in Montenegro, the Interior Minister announced on Thursday.

“Montenegrin Police have arrested a suspected most wanted fugitive, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs,” the minister tweeted. Interior Filip Adzic.

He said the suspect was arrested at the airport in the capital Podgorica after being found carrying “falsified documents”.

“We are awaiting official confirmation of the identity,” Adzic added.

South Korea asked Interpol in September to circulate a “red notice” for the 31-year-old in the agency’s 195 member countries.

Kwon and five others linked to Terraform are wanted for fraud and the implosion of its digital currencies in May 2022.

TerraUSD was designed as a “stablecoin”, which is pegged to stable assets like the greenback to avoid drastic price swings.

However, around $40 billion in market value was wiped out for holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged well below its $1 peg in May last year.

Kwon is accused of “orchestrated a multi-billion dollar crypto asset securities fraud,” according to the U.S. Securities and Exchange Commission.

death spiral

Stablecoins are designed to have a relatively fixed price and are usually pegged to a real-world commodity or currency.

Many investors lost their life savings when Luna and Terra entered a death spiral, and South Korean authorities opened several criminal investigations into the accident.

Cryptocurrencies are coming under increasing scrutiny from regulators around the world following a series of recent controversies, including the highly publicized collapse of crypto exchange FTX.

FTX and its sister trading house Alameda Research went bankrupt late last year, dissolving a virtual trading company that had been valued by the market at $32 billion.

The fall of FTX raised major doubts about the cryptocurrency’s long-term viability and added stress on other platforms and entities that rode on the success of Bitcoin and other currencies.

To add to its growing woes, 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 rocked global markets and raised fears of future economic turmoil. .

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