Do Kwon, Founder of Terra, Faces Extradition for Alleged Involvement in Serbian Crypto Firm

The manhunt for Terraform Labs’ co-founder, Do Kwon, came to an end on Thursday with reports of his arrest in Podgorica, Montenegro. Kwon, who is identified as the mastermind behind the Terra Luna UST collapse, which wiped out over $40 billion from the crypto market, was highly prioritized for arrest by Interpol officers.

Kwon, along with Hon Chang Joon, the CEO of Chai Corp, was detained in Podgorica while attempting to fly to Dubai with falsified Costa Rican traveling documents. According to a statement released by Montenegro’s Interior Ministry on Thursday, the two were also found with Belgian and South Korean traveling documents. Kwon was on Interpol’s radar after his native country, South Korea, issued a red alert last year.

Terra-associated Projects Drop in Value 

Following the announcement of Kwon’s arrest, Terra-associated projects, including LUNA and LUNC, dropped in value. According to market data provided by Coingecko, Terra LUNA dropped approximately 6.2% in the last 24 hours, trading around $1.32. On the other hand, Terra Luna Classic (LUNC) declined approximately 2% in the past 24 hours, trading around $0.000124 on Friday.

Kwon and His Business Operations in the Past Year

According to the Serbian High-Tech Criminal Prosecutor’s and U.S. Federal Prosecutor’s Office, Do Kwon and former Chai Corp CEO Han Chang-joon established a crypto business in Serbia. Investigators are trying to understand if the crypto business in Serbia was meant to help Kwon launder his ill-gotten cash. 

The United States District Court in the Southern District of New York filed an indictment against Kwon on several charges, including wire fraud, conspiracy to defraud and engage in market manipulation, securities fraud, and commodities fraud. As a result, Kwon is being sought after by several jurisdictions, including Singapore.

Terra Luna UST’s collapse remains a mystery to the cryptocurrency industry. This has increased fear of algorithmic stablecoins like Cardano’s DJED.