Do Kwon, a prominent crypto founder who was behind two digital currencies that crashed last year, has been arrested in Montenegro, local government authorities confirmed Thursday.
The arrest caps a months-long search for the crypto entrepreneur, who once had a devoted fan base but lost the faith of many investors after last year’s crypto meltdown.
Authorities had believed that Kwon, the South Korean developer of the TerraUSD and Luna cryptocurrencies, went into hiding after his home country issued an arrest warrant for him in September. At the time, Kwon denied he was a fugitive in a tweet. But since then his once-active Twitter account has fallen silent.
Disgraced crypto founder says he’s not on the run. But no one knows where he is.
But Thursday brought new details of his whereabouts. Montenegro’s Interior Ministry said it “apprehended” Kwon and brought him and a fellow South Korean citizen to a prosecutor’s office in the capital city on charges of document forgery. South Korea had 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. Its boom started to fizzle last spring when Luna crashed and sparked broader crypto market turmoil that saw other firms collapse. The so-called “crypto winter” deepened in November when FTX, a crypto exchange, went bankrupt, and its founder, Sam Bankman-Fried, was later charged with fraud.
Since then, other firms and crypto boosters have faced regulatory pressure, including the crypto exchange Kraken, which in February agreed to stop selling certain assets and pay a $30 million settlement with the Securities and Exchange Commission.
On Wednesday, meanwhile, the SEC filed a complaint against eight celebrities, including professional boxer Jake Paul and actress Lindsay Lohan, accusing them of failing to disclose their compensation for the promotions.
Both Terra and Luna took off among crypto enthusiasts and multiplied in value before ultimately crashing last year. Investors have said Kwon defrauded them in promoting the coins.
Before the crash, Kwon was well regarded, while his fans called 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 watched closely as governments around the world weigh how to prosecute cases involving cryptocurrency 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.