Terra Founder Do Kwon Finally Arrested By the Interpol in Montenegro
Nine months after the collapse of the Terra ecosystem that led to a $40 billion erosion of investors’ wealth, Terra founder Do Kwon has been finally arrested by the Interpol in Montenegro on Thursday, March 22.
The disgraced Terra founder was on an Interpol lookout for a few months now. Speaking to CNN, Interpol’s national central bureau in Seoul confirmed that Kwon’s identity has been confirmed through a fingerprint match.
A day before, Montenegrin Internal Affairs Minister Filip Adžić also stated that a man believed to be Do Kwon has been arrested in the capital Podgorica. In his Facebook post, Adžić wrote: “He was arrested at the airport with counterfeit documentation and is wanted by several countries, including the USA, South Korea, and Singapore”.
Do Kwon was initially operating Terrform Labs from South Korea, however, after the collapse, he first moved to Singapore and stayed there for a while. Later in September 2022, a South Korean court issued an arrest warrant for Kwon and has been charged with fraud as well as of South Korea’s capital markets law.
However, Kwon has rejected the charges stating that they were not legitimate and instead “politically motivated”. While Kwon’s physical location was never known, he made virtual appearances through his Twitter handle.
However, Do Kwon always stated that he was not “on the run,” but denied revealing his location citing his personal security. The collapse of Terraform Labs started with the depegging of the algorithmic stablecoin TerraUSD which eventually led to the massive sell-off of the native LUNA cryptocurrencies in the market.
The implosion of the Terra ecosystem had its ripple effects all across the crypto sector. In the subsequent months, big crypto hedge funds and crypto lenders like Three Arrows Capital, Voyager Digital and Celsius Networks announced bankruptcies.
Bloomberg report notes that it’s not clear if Do Kwon’s arrest has been on the request of US authorities, however, federal prosecutors said that they would like his extradition to New York. If extradited to New York, Do Kwon shall be facing prosecution by the same office that’s currently overseeing the criminal case against FTX and its founder Sam Bankman-Fried.
As per the US indictment, Do Kwon deceived investors about different aspects of the Terra blockchain such as its underlying technology and the extent to which it was adopted by users.
This indictment cites misleading and false statements made by Do Kwon in an TV interview. Besides, Kwon is also facing charges of market manipulation with an unidentified US trading firm to alter the market price of TerraUSD.