Vice President Filip Adzic confirmed that the person believed to be Do Kwon had been arrested in Montenegro.
South Korean authorities have since confirmed the detainee is Do Kwon.
Montenegrin Vice President Filip Adjic has confirmed the arrest of a person who travelled to Podgorica, Montenegro, suspected to be Terra fugitive Do Kwon.
The translated statement from the Vice President is as follows:
“Montenegro police have detained a South Korean citizen who is suspected to be one of the wanted criminals, Do Kwon, co-founder and CEO of Singapore-based Terraform Labs.”
In a tweet, Adjic called Do Kwon one of the world’s most wanted criminals, adding that the detainee was travelling with false documents.
Waiting for identity confirmation
In February, reports emerged that Do Kwon was hiding in Serbia, which borders Montenegro in the north. A delegation including members of the South Korean Ministry of Justice and the Prosecutor’s Office traveled to Serbia to search for the Terra Labs co-founder.
Adjic said they were waiting for official confirmation of the detainee's identity. South Korean authorities later confirmed the detainee was Do Kwon, who was arrested with assistance.
“We checked the age, nationality and name through the ID card held by the person and confirmed through photo data that he is the same person as Representative Quan.”
@FatManTerra, who dedicated his career to exposing the alleged fraud at the height of the frenzy, gave a damning summary of Do Kwon’s actions.
“He promoted a fake ecosystem built on deceptive trading. He orchestrated a secret bailout and told people it was ‘the power of his algorithms.’ He made fun of retail investors as they killed themselves.”
He did not back down and signed, hoping that the "full force of the law" would come upon him.
Terra Implosion
On May 9, 2022, the UST stablecoin lost its peg to the U.S. dollar, triggering a sharp decline in its balance sheet, Terra LUNA.
As an algorithmic stablecoin, UST regulates its supply through burning reductions or minting increases, combined with the opposite actions occurring in the balancing assets to maintain its peg.
Prior to the crash, UST had become the third-largest stablecoin by market cap, earning itself a degree of legitimacy by achieving that goal. However, after the crash (the first sign that all was not well in crypto), the contagion effect spread throughout the industry, causing liquidity issues elsewhere.
An investigation into the debacle uncovered damning allegations against the Terra ecosystem, including the deliberate exploitation of the Mirror Protocol to drain insiders, the use of shell companies to launder money, and Do Kwon stealing millions of dollars from the project every month.
An estimated $40 billion was lost and many lives were destroyed.
In an October 2022 interview with Laura Shin of the Unchained Podcast, Do Kwon stated that the fraud charges against him by South Korean authorities had no legitimacy.
Specifically, Do Kwon said that cryptocurrencies are not classified as securities in the country and do not fall under the jurisdiction of applicable laws, namely the Capital Markets Act.