(Bloomberg) -- Terraform Labs co-founder Do Kwon told officials in Montenegro he had enjoyed luxury treatment during months on the run over a cryptocurrency fraud that wiped out at least $40 billion.

“Do Kwon and his companion acted especially surprised and they told our officials that elsewhere in the world they had been used to VIP treatment,” Interior Minister Filip Adzic said in an interview in his office in the capital Podgorica on Tuesday.

Do Kwon and the company’s chief financial officer, Han Chang-joon, came into the country illegally because they were not registered upon entry anywhere in Montenegro, the minister said, adding they had spent some time before then in an unspecified neighboring country. Last month, South Korean officials were looking for Kwon in Serbia. The pair were arrested Thursday as they tried to fly to Dubai using falsified travel documents.

The collapse of Terraform’s TerraUSD stablecoin shook the crypto world last spring. Meant to keep a constant value of $1 via a complex mix of algorithms and trader incentives involving its free-floating sister token Luna, Terra was designed as a refuge from the volatility of other cryptocurrencies. But both Luna and Terra unraveled when confidence in Kwon’s project evaporated during a few chaotic days in early May.

Kwon’s whereabouts were the source of constant speculation since September, when South Korean authorities issued a warrant for his arrest on allegations including breaches of capital-markets law. Before last week’s arrest, Adzic said his ministry had information that the two people could be in the country.

“Upon further inspection, we found other passports, a forged Belgium passport and a South Korean passport in another name,” he said. 

Authorities also seized three laptops and five mobile phones, according to the minister. Adzic declined to comment on their content apart from saying that “we found significant amount of information that is very interesting.”

Do Kwon is being held in standard medical quarantine in Montenegro, a local prison official said in a separate interview earlier on Tuesday.

Kwon will remain there to rule out coronavirus infection through April 3, and can be visited only by his lawyer or doctor, said Rade Vojvodic, the head of Montenegro correctional facilities.

The 31-year-old is in good health and hasn’t made any special requests, he said. The facility is located in Spuz, a small town just north of the capital Podgorica.

The two are now under investigative detention that lasts up to 30 days. As they were apprehended in possession of several passports under different names, such detention was ordered “to formally assess their identity,” Vojvodic said. 

US federal prosecutors and South Korea have both said the intend to seek Kwon’s extradition to face criminal charges. 

Authorities in Montenegro said that have not yet received any formal extradition request.

--With assistance from Andrea Dudik.

(In third paragraph, fixes the name of the Terraform Labs chief financial officer to correct a mispelling in the official statement from Montenegro’s Interior Ministry)

©2023 Bloomberg L.P.