According to official information, one of the most wanted suspected white-collar criminals has been arrested in Montenegro. Montenegrin police arrested fugitive cryptocurrency entrepreneur Do Kwon “with forged documents” at Podgorica airport, Interior Minister Filip Adzic said on Twitter.
The collapse of his startup Terraform Labs wiped out about $40 billion in investor capital last year and rocked the global crypto markets. With the arrest of 31-year-old Do Kwon, one of the most wanted suspected crypto scammers is in police custody.
Do Kwon was the CEO and co-founder of a Singapore-based startup called Terraform Labs, which released cryptocurrency TerraUSD and sister currency Luna. Both imploded in May 2022, Terraform Labs went bankrupt and Do Kwon broke away.
Global manhunt since September
South Korea called Interpol in September to place Kwon on a global wanted list in 195 Interpol member states. He and five other people are wanted in connection with the bankruptcy of Terraform Labs. The US Securities and Exchange Commission (SEC) accuses the South Korean of “a billion dollar fraud”.
“Stablecoin” TerraUSD collapsed
Terraform Labs offered TerraUSD as a so-called “stablecoin”. Stablecoins are actually tied to stable assets like the dollar to avoid drastic price swings. However, TerraUSD was pegged to freely tradable sister currency Luna through a different mechanism common to some stablecoins.
In May last year, both currencies plummeted below the one-dollar mark, wiping out investor savings. The South Korean government subsequently launched an investigation into the crash and placed the now fugitive Do Kwon on its internationally wanted list.
Call for more crypto regulation
Cryptocurrencies have come under increasing scrutiny from regulators around the world following a series of controversies and scandals. Most recently, the bankruptcy of crypto exchange FTX and its sister company Alameda Research made headlines late last year. With the collapse of the two companies, a virtual trade deal with an estimated market value of $32 billion vanished into thin air.
The fall of FTX, along with the demise of two major US cryptocurrency lenders Silvergate and Signature amid a string of bank failures, has cast huge doubts on the long-term viability of cryptocurrencies and other platforms built on Bitcoin’s success and other digital currencies put under pressure.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
