Who is Do Kwon and why was he arrested?

It has been an eventful 10 months for fugitive Terraform Labs co-founder and chief executive Do Kwon , who was arrested on Thursday by police at Montenegro’s Podgorica airport . The cryptocurrency entrepreneur had been on the run since the $40 billion collapse of his “stablecoin” Terra USD and sister token Luna in May last year, which triggered a “crypto winter” and resulted in $2 trillion being wiped from the market value of cryptocurrencies in 2022. Here is all you need to know about Mr Kwon and his arrest: Mr Kwon, 31, was arrested on Thursday at Podgorica airport in Montenegro as he was trying to leave the country with Terraform Lab's chief financial officer Han Chang-joon. According to media reports, they were planning to fly to Dubai using fake Costa Rican passports. Mr Kwon's identity was confirmed through a fingerprint match, Interpol's national central bureau in Seoul told CNN on Friday. His arrest was also announced by Filip Adzic, Montenegro’s Internal Affairs Minister, on social media. “Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs,” Mr Adzic said on Twitter. Born in Seoul, South Korea, Mr Kwon’s real name is Kwon Do-hyung. He studied computer science at Stanford University in the US and, after graduating in 2015, went on to work briefly for technology companies Apple and Microsoft as a software engineer. After returning to Seoul in 2016, Mr Kwon founded Terraform Labs two years later with entrepreneur Daniel Shin. Later that year, they launched their algorithmic stablecoin TerraUSD and sister token Luna. The cryptocurrency entrepreneur is married with one daughter, who was born in April last year. He named her after Luna — his “greatest invention”, Mr Kwon said in a post on Twitter at the time. In an interview with The Wall Street Journal in June last year, Mr Kwon said he had lost almost all of his net worth after the collapse of TerraUSD and Luna. “This doesn’t bother me,” he said in the interview. “I live a fairly frugal life.” Mr Kwon told the newspaper he was probably a billionaire when the Luna token that Terraform Labs backed was trading near $100. That coin is now trading at about $1.39, according to crypto.com. Stablecoins are digital tokens pegged to fiat currencies, such as the US dollar, and are generally managed to preserve capital value, provide liquidity and minimise exposure to market risks, Fitch Ratings said in a note in May . However, Terra’s value was derived from algorithmic processes, which means the backing entity’s cryptocurrency reserve was not large enough to serve as a source of stability when its algorithmic peg mechanism came under speculative pressure, the rating agency said. The collapse of TerraUSD and Luna led to a massive sell-off in cryptocurrencies in May last year, wiping more than $200 billion in value from the market in only 24 hours. It triggered what is known as the “crypto winter”, which resulted in the collapse of other cryptocurrency companies such as Three Arrows Capital, Voyager Digital, Celsius and Sam Bankman-Fried’s FTX and Alameda Research. At the time, TerraUSD fell as low as 20 cents and caused thousands of investors around the world to lose their life savings. A month later, Bitcoin dropped below the key $20,000 level for the first time since December 2020, while about $2 trillion was wiped from the market value of cryptocurrencies , according to data compiled by CoinGecko. Yes. In September last year, prosecutors in South Korea applied for the red notice after a court in Seoul issued an arrest warrant for Mr Kwon and five colleagues, accusing them of breaching the country’s capital markets law. At the time, it was believed that Mr Kwon was in Singapore, where he had based Terraform Labs. However, Singapore’s police force said on September 17 that he was not in the city-state and his whereabouts were unknown. But in a series of tweets at the time, Mr Kwon said: “I am not ‘on the run’ or anything similar — for any government agency that has shown interest to communicate, we are in full co-operation and we don’t have anything to hide.” In December, prosecutors in Seoul said they believed Mr Kwon had moved to Serbia, a six-hour drive from Montenegro, where he was arrested. Hours after his arrest on Thursday, US prosecutors in Manhattan filed an eight-count indictment against Mr Kwon, charging him with offences such as securities and commodities fraud, and conspiracy, Bloomberg reported. “The indictment cites false and misleading statements Kwon made in a television interview and on social media about the alleged scheme. Prosecutors also accuse Kwon of misleading purchasers of cryptocurrencies issued by Terraform, including Luna and the stablecoin,” Bloomberg reported. It is currently unclear where Mr Kwon will face charges, with prosecutors in the US already seeking his extradition to New York. On Friday, police in South Korea said they had also asked Montenegro to extradite Mr Kwon to Seoul, according to Bloomberg. Both countries are signees to the European Convention on Extradition, South Korea’s Justice Ministry said.

Who is Do Kwon and why was he arrested?

Prosecutors in the US and South Korea are seeking to extradite the co-founder of Terraform Labs after its $40 billion collapse last year