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Do Kwon, wanted in $40 billion crypto token crash, arrested in Montenegro

Police in Montenegro have arrested Terraform Labs founder Do Kwon, who is wanted in the U.S. and South Korea in connection with a $40 billion crash of the firm's cryptocurrency that devastated retail investors around the world, the European country's interior minister said Thursday.

"Montenegrin police arrested an individual who is believed to be one of the most wanted fugitives, South Korean citizen Do Kwon," Interior Minister Filip Adzic said on Twitter. 

Federal prosecutors in New York indicted Kwon on fraud charges hours after the arrest. Kwon faces eight counts, including conspiracy to defraud and engage in market manipulation, conspiracy to defraud, and two counts each of wire fraud, commodities fraud, securities fraud, the indictment from the United States District Court for the Southern District of New York shows.

South Korea, of which Kwon is a citizen, issued an arrest warrant for the former crypto CEO in September. The country's officials also asked Interpol to circulate a "red notice" for the 31-year-old Kwon across the agency's 195 member nations to find and apprehend him. 

Both U.S. and South Korean officials have said they intend to extradite Kwon, Bloomberg reported.

Kwon and the other man with whom he was arrested had been hiding in Serbia but moved to Montenegro after South Korean investigators tracked their whereabouts and asked Serbian authorities to detain them, Montenegro's interior ministry said. The men were arrested at Montenegro's Podgorica Airport while trying to depart for Dubai using fake Costa Rican passports, the ministry said.

Kwon is wanted because of allegations of fraud and financial crimes in relation to the implosion last May of a pair of cryptocurrencies created by Terraform Labs. The U.S. Securities and Exchange Commission also filed civil charges against Kwon last month.

TerraUSD was designed as a "stablecoin," which are pegged to stable assets like the U.S. dollar to prevent drastic fluctuations in prices. However, around $40 billion in market value was erased for the holders of TerraUSD and its floating sister currency, Luna, after the stablecoin plunged far below its $1 peg in May.

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