Mar 28, 2023
Crypto Mogul Do Kwon Held in Montenegro Quarantine
(Bloomberg) -- Terraform Labs co-founder Do Kwon, wanted by the US over a cryptocurrency fraud that wiped out at least $40 billion in market value, is being held in standard medical quarantine in Montenegro, a local prison official said.
Kwon will remain there to rule out coronavirus infection through April 3, and can be visited only by his lawyer or doctor, Rade Vojvodic, the head of Montenegro correctional facilities, said in an interview on Tuesday.
The 31-year-old, also wanted in South Korea, 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.
Kwon and the company’s chief financial officer, Han Chang-joon, were arrested Thursday in Podgorica as they tried to fly to Dubai using falsified travel documents, according to Montenegro’s Interior Ministry. His lawyer denied the allegations.
The collapse of Singapomre-based 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.
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. The two men were also found with Belgian and South Korean travel documents, according to Montenegrin authorities. The Belgian papers were falsified, according to Interpol.
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 extradition request.
Crypto Mogul Kwon Hit With US Fraud Charges Following Arrest
--With assistance from Andrea Dudik.
(In fourth paragraph, fixes the name of the Terraform Labs chief financial officer to correct a mispelling in official statement from Montenegro’s Interior Ministry)
©2023 Bloomberg L.P.