© Reuters
By Geoffrey Smith
Investing.com — Do Kwon, the fugitive founder of the stablecoin network whose collapse sparked the cryptocurrency rout last year, has reportedly been arrested in the Balkan state of Montenegro.
The country’s interior minister, Filip Adzic, tweeted on Thursday that Montenegrin police arrested Mr Kwon at Podgorica airport, where he was apparently trying to leave the country with fake documents.
Mr Kwon, from South Korea, has been on the run since Interpol issued an international arrest warrant for him in September at the request of prosecutors in his home country. Authorities in Singapore, where he led the organization behind the Terra/Luna stablecoin, said he was no longer in the island state. Various internet rumors suggested he had kept a low profile in Serbia, which has no extradition deal with South Korea.
Terra/Luna, an algorithmic stablecoin that Kwon had touted as having the ability to regulate its own circulation in order to preserve parity with the dollar, suddenly crashed last April, causing billions of dollars in losses for various investment firms in cryptocurrencies.
Early casualties included Celsius Network and Three Arrows Capital, but the episode also indirectly led to the collapse of cryptocurrency exchange FTX in November. FTX expropriated client deposits to cover losses made on Terra/Luna earlier in the year by its affiliate hedge fund, Alameda Research.