Do Kwon, creator of the Terra and Luna cryptocurrencies, is arrested in Montenegro

The creator of the Terra cryptocurrency was arrested in Montenegro for using forged documents to flee to Dubai on accusations of millionaire fraud.


The South Korean founder of cryptocurrency  Terra , Do Kwon , has been indicted for falsifying documents and is due to appear before a court in Montenegro on Friday to hear an extradition request.

Do Kwon , whose full name is Kwon Do-hyun , was detained Thursday at Podgorica airport, along with his chief financial officer, Hon Chang Joon, under a South Korean arrest warrant.

Kwon , 31, is the founder of Terraform Labs , parent company of the “crypto stablecoin” Terra , which went under in May 2022. He is charged with fraud over the collapse of his company, after which they were found to be missing. about 40,000 million dollars from investors.

“A criminal complaint was filed against both persons for falsification of documents,” the Montenegrin police reported .

The creator of Terra would be extradited to South Korea

Kwon will appear before the Podgorica High Court on Friday, where the extradition request will be examined, a court official told AFP , without specifying which country issued the request.

The Montenegrin authorities indicated the day before that Kwon used “falsified documents from Costa Rica” during a control to take a flight to Dubai.

Travel documents from Belgium and South Korea were found during inspection of his luggage, and Interpol checks revealed that the Belgian documentation was false, the Montenegro Interior Ministry said .

In South Korea , where he is accused of breaking financial market rules, the prosecution announced Friday that it would “take steps to repatriate Kwon Do-hyung .”

“We are working on the process,” Kim Hee-kyung , the spokeswoman for the Seoul South district office, told AFP .

South Korea’s National Police Agency said it will “actively cooperate” with the Montenegro prosecutor’s office to secure his extradition.

billion dollar fraud

Shortly after his arrest, a US federal jury indicted him on eight counts, including stock fraud and online fraud.

Kwon is accused of “organizing a multi-billion dollar cryptocurrency fraud,” US stock exchange regulator SEC reported .

Kwon is suspected of having fled South Korea via Singapore when his company went under in May 2022.

In September, the South Korean prosecutor’s office asked Interpol to include his name in the red notice of wanted persons and also withdrew his passport.

After several reports that Kwon flew to Singapore , speculation about his whereabouts grew, especially after the Singapore police reported that the businessman was not in the country.

South Korea is a member of the European Convention on Extradition and Montenegro is also a signatory, South Korea’s justice ministry said in a statement.

“The Ministry of Justice will proceed with the extradition process in accordance with the laws and international agreements ,” he added.

Cryptocurrencies are being investigated by regulators around the world, following the media collapse of various assets, including the crash of the FTX platform .

Many people lost their life savings when Kwon’s Luna and Terra digital currencies plunged, prompting South Korean authorities to open several investigations.

“Kwon did too much harm to too many people, with something that carried a lot of inexplicable risks,” Cho Dong-keun , emeritus professor of economics at Seoul-based Myongji University, told AFP .

In principle, a cryptocurrency called stable, or “stablecoin”, guarantees more stability to investors in this highly volatile environment.

Its price can be tied to that of a traditional currency or tangible assets, but this was not the case with Terra , which was tied to another crypto asset developed by Luna Foundation Guard , also created by Kwon .