Do Kwon – the crypto executive behind the Terra USD collapse that occurred in the summer of 2022 – has been arrested and taken into custody.
Do Kwon Has Reportedly Been Taken In
Kwon has allegedly been a fugitive these past few months. He was apprehended in the European nation of Montenegro, where he was found to be holding phony passports and documentation. The country’s interior minister Filip Adzic issued the following statement:
Montenegrin police have detained a person suspected of being one of the world’s most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs. The former ‘cryptocurrency king’, who is behind losses of more than 40 billion dollars, was detained at the Podgorica airport with falsified documents, and South Korea, the USA, and Singapore are demanding [his extradition].
The collapse of Terra USD and its alternate Luna token cost crypto investors billions in hard-earned investment funds. In late 2022, the region of South Korea issued an arrest warrant for Kwon, citing him as the main person of interest behind the collapse given his status as CEO of Terraform Labs, the company responsible for the creation of both assets.
Kwon eventually went into hiding while claiming on Twitter that he was willing to cooperate with the authorities and that he was not running from the law. In fact, he went so far as to say he was simply coding in his living room.
His presence in Montenegro appears to put these statements in doubt. By February 1 of this year, Kwon had gone silent on social media and he hasn’t tweeted anything since. According to Montenegro authorities, Kwon had allegedly been trying to travel to Dubai using a phony Costa Rican passport. He was also in possession of what has been deemed a fake Belgian passport.
South Korean law enforcement agencies have already confirmed that the fingerprints of the arrested man match those of Kwon’s, suggesting they now have their man.
Terra USD had been classified as a stable coin, so it was shocking to many people not only when the asset lost its peg, but when it went under fully. However, what many traders likely didn’t understand was that it was merely an “algorithmic” stable coin, meaning it wasn’t tied to any serious collateral (i.e., gold or precious metals) or fiat currencies. Rather, its value only stayed consistent when people chose to believe in it.
Was This All a Scam?
It has been suggested that the $40 billion collapse of the asset may have been a rug pull of sorts or a similar scam given that just weeks before the crash occurred, Kwon and various executives of the company moved millions of dollars in BTC out of the project.
Kwon’s lawyers have yet to comment on his arrest.
