Terraform Co-Founder Do Kwon Arrested in Montenegro After Months on the Run

Do Kwon Caught at Podgorica Airport

Do Kwon, co-founder of Terraform Labs, was arrested by Montenegro police at Podgorica airport while trying to board a flight to Dubai, according to Reuters. 

During the encounter, the Montenegrin police discovered forged Costa Rican passports and a Belgian passport in their luggage. The Montenegrin police formally charged the ex-Terra CEO along with a second suspect for allegedly forging official documents before a Podgorica court. 

After matching fingerprints with official records, South Korean police confirmed that Kwon was the suspect in Montenegro on Friday.

Within hours of Kwon's detention in Podgorica, the U.S. District Court in Manhattan made public an eight-count indictment against him. This includes two counts each of securities fraud, wire fraud, commodities fraud, and conspiracy. 

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Allegations Against Do Kwon by SEC

The recent criminal case followed last month's civil charges brought against Kwon and Terraform by the Securities and Exchange Commission.

According to SEC allegations, Do Kwon misled investors regarding TerraUSD's stability and failed to inform them that the coin's price fell below its dollar peg. The value of the token and its underlying cryptocurrency sank to near zero last May, resulting in a sell-off in cryptocurrencies such as Bitcoin, Ethereum, and Tether as a result. 

Additionally, the SEC claims that Kwon and Terraform falsely claimed Chai, a Korean mobile payment app, used the Terraform blockchain to process payments.

Worth noting that South Korean authorities issued an arrest warrant for Mr. Kwon last September after determining Terraform Labs had violated capital market regulations.

South Korean officials believed he was in Serbia and sent officials to Belgrade to negotiate since there was no extradition treaty between the two countries.

A Seoul prosecutor told CNN in December that the crypto entrepreneur hid in Serbia after leaving Singapore via Dubai. Kwon was based in Singapore while running the blockchain platform Terraform Labs.