Do Kwon, the co-founder and CEO of Terraform Labs, the business responsible for the $50 billion Terra ecosystem that made headlines last year, was detained in Montenegro.
Do Kwon arrest in Montenegro?
A formal tweet states that Kwon has been accused of forging documents. Kwon had forged passports from Belgium and Costa Rica, according to the local media.
He was taken into custody together with a second individual, Hon Chang Joon, while they were getting ready to board a flight to Dubai. Three laptops and five mobile phones were among the other things seized from them.
According to the Council of Europe, Montenegro will only extradite individuals under bilateral agreements and will transfer such individuals within 30 days after receiving extradition approval.
In his native South Korea, Kwon is wanted for questioning.
At the request of South Korean authorities, the international police network Interpol issued a “red notice” for Kwon in September. A red notice is an order to international law enforcement organizations to detain someone for a specific offense.
After being detained in Montenegro, Do Kwon was promptly charged with fraud in the US.
According to the charges, Kwon was accused of securities fraud, wire fraud, and commodities fraud by a grand jury in a New York federal court.
Moreover, Kwon is facing SEC charges in federal court in the Southern District of New York. Last month, the securities regulator accused Kwon of making an unregistered security offering.
Collapse of UST
Kwon was the first of several crypto industry heavyweights to watch their empires fall apart in 2022.
He was widely criticized on social media in the aftermath of the tens of billions of dollars that went up in smoke as the mechanisms supporting UST and LUNA showed out to be anything but stable when the UST stablecoin, a critical part of the Terra ecosystem, collapsed along with its sister token LUNA.
A study commissioned by Terraform Labs alleged that the Luna Foundation Guard spent $4.3B to protect the stablecoin’s peg to a U.S. dollar during its collapse, –to rebuild the project’s reputation.