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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 on Thursday.
The arrest caps a months-long search for the crypto entrepreneur who once had a loyal following but lost the trust of many investors following last year’s crypto meltdown.
Authorities had believed that Kwon, the South Korean developer of cryptocurrencies TerraUSD and Luna, went into hiding after his home country issued an arrest warrant for him in September. At the time, Kwon tweeted that he was a refugee. But his once-active Twitter account has since gone silent.
The disgraced crypto founder says he’s not on the run. But nobody knows where he is.
But Thursday brought new details about his whereabouts. The Montenegrin Interior Ministry said it had “arrested” Kwon and taken him and another South Korean national to a prosecutor’s office in the capital for 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 continues to be battered. His boom began to fizzle out last spring when Luna crashed, sparking broader turmoil in the crypto market that caused other companies to collapse. The so-called “crypto winter” intensified 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 crypto exchange Kraken, which agreed in February to halt sales of 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 started among crypto enthusiasts and multiplied in value before finally crashing last year. Investors have said Kwon cheated them in promoting the coins.
Before the crash, Kwon was highly respected, 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 closely watched as governments around the world weigh how to prosecute cryptocurrency cases and how aggressively to prosecute the entrepreneurs behind the coins. Among them is FTX founder Bankman-Fried, who is under house arrest while government agencies pursue a slew of civil and criminal charges against him.