The founder of the cryptocurrency project Terraform Labs was detained in Montenegro

The Ministry of Internal Affairs of Montenegro announced yesterday detention co-founder of the cryptocurrency project Do Kwon, who was previously issued Interpol warrant. Mr. Kwon was put on the wanted list at the request of the South Korean authorities after depreciated one of the largest cryptocurrencies in the world by capitalization is Luna, which is part of the Terra ecosystem.

The founders of the project aimed to create a bridge between traditional finance and cryptocurrencies. To do this, the ecosystem used stablecoins – digital coins pegged to the exchange rate of various national currencies. One of these was Terra USD (UST). On May 10, one of the major investors in the project put up for sale UST for a total amount of about $300 million, which caused a panic in the market, and the UST rate began to fall seriously. Mr. Kwon, along with five employees of Terraform, is suspected of fraud and theft of funds from users of the Terra project.

Montenegrin police said the arrest took place at Podgorica airport when Mr. Kwon was trying to board a flight to Dubai. He was found to have fake passports from Costa Rica and Belgium. In addition to the South Korean authorities, Do Kwon was also accused of fraud by the US Securities and Exchange Commission (SEC). A few hours after the arrest of Mr. Kwon in Montenegro, the US authorities officially submitted their charges in the Manhattan District Court.

Evgeniy Khvostik