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Controversial crypto founder Do Kwon arrested in Montenegro


Do Kwon, a prominent crypto founder who was behind two digital currencies that crashed last year, has been arrested in Montenegro, local authorities confirmed on Thursday.

The arrest concludes a months-long search for the crypto entrepreneur, who once had a devoted fan base but lost the trust of many investors after last year’s crypto crisis.

Authorities believed Kwon, the South Korean developer of the cryptocurrencies TerraUSD and Luna, had gone into hiding after his home country issued an arrest warrant against him in September. At the time, Kwon denied in a tweet that he was a fugitive. But since then, his once active Twitter account has gone silent.

The disgraced crypto founder says he is not on the run. But nobody knows where he is.

But Thursday brought new details about his whereabouts. Montenegro’s interior ministry said it had “arrested” Kwon and took him and a fellow South Korean citizen to a prosecutor’s office in the capital on charges of document forgery. South Korea reportedly asked Interpol to issue a “red notice,” allowing other countries to provisionally arrest Kwon.

Kwon’s arrest comes as the cryptocurrency market remains battered. The thump began to hiss last spring when Luna crashed and sparked a wider turmoil in the crypto market that caused other companies to collapse. The so-called “crypto winter” deepened in November when FTX, a crypto exchange, went bankrupt and its founder, Sam Bankman-Fried, was later accused of fraud.

Since then, other companies and crypto boosters have faced regulatory pressure, including crypto exchange Kraken, which in February agreed to stop selling certain assets and pay a $30 million settlement with the Securities and Exchange Commission.

Meanwhile, the SEC filed a complaint against eight celebrities on Wednesday, including professional boxer Jake Paul and actress Lindsay Lohan, accusing them of failing to disclose their compensation for the promotions.

Both Terra and Luna caught on with crypto enthusiasts and multiplied in value before finally crashing last year. Investors have said that Kwon scammed them in promoting the coins.

Before the crash, Kwon was well regarded, with his fans calling themselves “Lunatics” after his token. He graduated from Stanford University and briefly worked for Apple before founding several crypto projects, including Luna.

Kwon’s case has been closely watched as governments around the world weigh how to prosecute cryptocurrency-related cases and how aggressively to pursue the entrepreneurs behind the coins. Among them is FTX founder Bankman-Fried, who is under house arrest pending a slew of civil and criminal charges brought against him by government agencies.

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