A person suspected to be Do Kwon, an international fugitive accused of defrauding investors in a multibillion-dollar cryptocurrency scheme, has been arrested in Montenegro, the country's interior minister said Thursday.
Crypto entrepreneur and Terraform Labs founder is wanted in South Korea in connection with a $40 billion crash of the firm’s cryptocurrency that devastated retail investors around the world.
"The person is suspected of being one of the most wanted fugitives, South Korean national Do Kwon, a co-founder and CEO of the Singapore-based Terraform Labs," Filip Adzic, the Montenegrin interior minister, wrote on Twitter.
Montenegrin authorities were awaiting official confirmation of the identity of a man who was arrested at the airport in the capital, Podgorica, with false documents, but they believe it’s Kwon, Adzic added.
South Korea asked Interpol in September to circulate a "red notice" for the 31-year-old across the agency's 195 member nations to find and apprehend him.
South Korean police said a suspect thought to be Do Kwon, and another person, thought to be an individual named Han Chang-Joon, had been arrested in Montenegro.
"We have not yet received fingerprints from Montenegro, but we plan to have final identity verification by tomorrow morning," an official at the Korean National Police Agency told Reuters.
In February, the U.S. Securities and Exchange Commission filed a civil lawsuit against Kwon and Terraform Labs in Manhattan federal court, accusing them of defrauding investors in what the regulator deemed a multibillion-dollar scheme.
"The former cryptocurrency king who is behind losses of over $40 billion, has been apprehended at the Podgorica airport with forged documents. The same person is being sought by South Korea, the United States and Singapore," Adzic said.
A police officer who asked not to be named told Reuters that an identification procedure was underway.
"If the identity of that person is confirmed, he will be placed in extradition detention," he said.
Last week, the Wall Street Journal reported that the U.S. Justice Department was investigating the 2022 collapse of the TerraUSD stablecoin and had questioned former team members of Terraform Labs, which was behind the stablecoin.
TerraUSD was designed as a stablecoin, which is 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.