Thu Kwon
$40 billion wiped out: World’s most wanted cryptocurrency entrepreneur arrested
Terraform Labs is blamed for the destruction of $40 billion worth of cryptocurrency.
© Cylonphoto / Picture Alliance
Police in Montenegro have arrested fugitive cryptocurrency founder Do Kwon. The police arrested the 31-year-old South Korean with false papers at the airport in the capital Podgorica, state television RTCG reported.
One of the world’s most wanted suspected white-collar criminals has been arrested in Montenegro. Police arrested fugitive cryptocurrency entrepreneur Do Kwon with forged documents at Podgorica airport, Interior Minister Filip Adzic said on Thursday. For its part, the USA announced that charges had been brought against the 31-year-old. The collapse of his startup Terraform Labs wiped out around $40 billion in investor capital last year and shook global crypto markets.
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According to the police, Kwon wanted to fly from Montenegro to Dubai. He and a second South Korean wanted to use “counterfeit travel documents from Costa Rica”. Passports from Belgium and South Korea were also found during a baggage check – the Belgian documents were obviously forged. Three laptops and five cell phones were confiscated during the arrest.
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With the arrest, one of the most wanted suspected crypto scammers is in police custody. Kwon was the head and co-founder of Singapore-based startup Terraform Labs, which issued cryptocurrency TerraUSD and sister currency Luna. Both imploded in May 2022, Terraform Labs went bust and Kwon broke away.
South Korea called Interpol in September to put Kwon on a global wanted list in 195 Interpol member states. He and five other people are wanted in connection with the Terraform Labs bankruptcy. For its part, the US Securities and Exchange Commission (SEC) accuses the South Korean of “fraud worth billions”. The US Attorney’s Office announced on Thursday that eight counts of charges had been brought against Kwon.
Again and again scams with crypto money
Terraform Labs offered TerraUSD as a so-called “stablecoin”. Stablecoins are actually pegged to stable assets like the dollar to prevent drastic price swings. However, TerraUSD was tied to freely tradable sister currency Luna via a different mechanism common to some stablecoins. In May last year, both currencies plummeted below the one-dollar mark, wiping out investors’ savings.
Cryptocurrencies have increasingly come under the scrutiny of regulators around the world after a series of controversies and scandals. Most recently, the bankruptcy of the crypto exchange FTX and its sister company Alameda Research made headlines at the end of last year. With the collapse of the two companies, a virtual trading deal with an estimated market value of $32 billion vanished into thin air.
The fall of FTX, along with the demise of two major crypto lenders Silvergate and Signature in the US amid a series of banking failures, has raised enormous doubts about the long-term viability of cryptocurrencies and other platforms built on the success of Bitcoin and other digital currencies. put under pressure.