Do Kwon

Terra co-founder Do Kwon will stay in Montenegro until February: Report

The Terraform Labs co-founder had been awaiting extradition to either the U.S. or South Korea after serving a prison sentence in Montenegro for using falsified travel documents.

Terraform Labs co-founder Do Kwon, expected to be extradited to the United States to face criminal charges, will reportedly stay in Montenegrin custody until February.

According to a Dec. 12 Bloomberg report, authorities with the U.S. and South Korea requested Montenegrin officials hold Kwon for an additional two months following the conclusion of his prison sentence. The Terraform Labs co-founder was arrested in Montenegro in March for using falsified travel documents and sentenced to four months behind bars.

Kwon, a South Korean national formerly based in Singapore, has been charged in the U.S. and South Korea for his alleged role in the collapse of Terra. The Wall Street Journal reported on Dec. 7 that the U.S. would be taking custody of Kwon before South Korea. Both countries have extradition requests pending at the time of publication.

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Montenegrin official plans to extradite Do Kwon to the United States: Report

The Terraform Labs co-founder had been awaiting extradition to either the U.S. or South Korea after being arrested and charged in Montenegro.

Terraform Labs co-founder Do Kwon will reportedly be extradited to the United States rather than South Korea to face criminal charges.

According to a Dec. 7 Wall Street Journal report citing people familiar with the matter, Justice Minister Andrej Milović in Montenegro plans to grant U.S. officials’ request for extradition. Kwon was arrested in Montenegro in March and sentenced to four months in prison for using falsified travel documents. He has also been charged in the U.S. and South Korea for his alleged role in the collapse of Terraform Labs.

Milović reportedly said the announcement would be made public “in a timely manner.” If extradited to the U.S., Kwon faces eight charges, including commodities fraud, securities fraud, wire fraud and conspiracy to defraud and engage in market manipulation related to his time at Terra. The U.S. Securities and Exchange Commission also charged Kwon with “defrauding investors in crypto schemes” in February.

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Terraform’s Do Kwon mounts last-ditch effort to avoid extradition: Report

Lawyers for Terraform Labs co-founder Do Kwon have mounted a final attempt to appeal his extradition from Montenegro.

Terraform Labs co-founder Do Kwon has launched his final attempt to appeal a Montenegrin court’s decision that could see him extradited from the country. 

In a Dec. 6 report, local state media stated that lawyers for Kwon had officially appealed the Nov. 24 decision from the High Court of Podgorica, which approved that Kwon could be extradited to either the United States or South Korea pending a final decision by the Montenegrin Ministry of Justice.

The Ministry of Justice will now consider the appeal and reexamine the initial extradition order and is currently slated to make a final decision on the matter by Dec. 15.

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Terra co-founder Daniel Shin’s arrest denied by court, citing low flight risk

Shin currently faces multiple fraud charges, specifically concerning allegedly hiding risks associated with investing in the in-house tokens by Terraform Labs.

A local court in South Korea denied the prosecutor’s request to issue an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong, also known as Daniel Shin. This was the second attempt made by South Korean authorities to reign in Shin following the recent arrest of Do Kwon — Terra’s other co-founder.

On March 23, Kwon was arrested at Podgorica airport in Montenegro while attempting to use fake documents to fly abroad. The Seoul Southern District Prosecutors Office took advantage of this situation and, on March 27, requested an arrest warrant for Shin, citing his involvement in cashing in illicit profits from Terra (LUNA) and TerraUSD (UST) sales.

However, the Seoul Southern District Court denied the request while citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence, according to local media Yonhap.

Shin currently faces multiple fraud charges, specifically in relation to allegedly hiding risks associated with investing in the in-house tokens by Terraform Labs.

Related: South Korea to examine crypto staking services following the Kraken case

Following Kwon’s arrest in Montenegro, authorities from both the United States and South Korea have tried to extradite the entrepreneur.

As Cointelegraph reported, Montenegrin Justice Minister Marko Kovač said the U.S. made diplomatic efforts to ask for Kwon to be handed over, while South Korean officials have requested extradition.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Kovač through an interpreter.

Terra’s branding at MLB opener draws attention from spectators

An attendee shared an image of a Terra banner with the slogan “a decentralized economy needs decentralized money,” prominently displayed during Major League Baseball’s opening day.

As baseball enthusiasts flocked to Nationals Park in Washington D.C for the opening day of the Major League Baseball (MLB) season, the appearance of Terra — the crypto ecosystem that collapsed in May 2022 — didn’t go unnoticed by attendees.

A Twitter user who attended The Washington Nationals’ home opener against the Atlanta Braves on March 30 shared an image of Terra prominently displayed on a banner with the slogan, “a decentralized economy needs decentralized money.”

“Sounds like a solid company. Will check out,” the user commented on the prominent placement of Terra at the stadium.

Another Twitter user said the Terra Club — a VIP pre-game venue experience — is behind the home plate at Nationals Park, and “a big sign in left center” promoting Terra.

The partnership between Terra and The Washington Nationals’ came into effect in February 2022, just months before Terra’s collapse.

The Terra community committed $38.2 million in TerraUSD (UST) over five years to secure the deal.

Related: ‘Wild’ — SEC going after Terra sparks responses from crypto lawyers

Terra’s founder, Do Kwon, proposed the partnership through the community’s governance platform. Kwon is currently in police custody in Montenegro, and will reportedly face harsh conditions in the penal system, according to an unnamed criminal defense lawyer, in a March 29 Protos report.

It was reported that the conditions at Montenegro’s jails and prisons “haven’t changed” from those described in a 2020 human rights report by the United States State Department.

The report cited a 2015 case in which prison officers were convicted of torturing and “inflicting grievous bodily harm” on 11 inmates.

Cointelegraph reached out to the Washington Nationals for comment but did not receive a response by the time of publication.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Do Kwon registered a company in Serbia for $1 amid Interpol red notice: Report

The Terraform Labs co-founder reportedly established “Codokoj22 d.o.o. Beograd” in Serbia, with its main business activity listed as consultancy services.

Terraform Labs co-founder Do Kwon established a company in Serbia for less than $1 just weeks after being flagged with an Interpol “red notice,” according to documents from the Serbian Business Registry.

As per a DLNews report on March 27, citing the official records, Kwon opened a company called “Codokoj22 d.o.o. Beograd” in October 2022 for 100 Serbian dinars ($0.92). 

It registered its main business activity as consultancy services.

Although Kwon is the company’s sole owner, Han Chang-Joon, the former CEO of Chai Corporation, was reportedly listed as a co-director.

It has also been alleged that Kwon and Han used their Korean passports to register the company — which is still reportedly in operation — with the Serbian Business Registry.

Source: dlnews.com

The report also noted that Kwon allegedly contracted a Serbian law firm, Gecic Law, to represent him.

Ognjen Colic, a partner at Gecic Law, reportedly stated that Kwon underwent the standard security checks performed by the firm for every client, including an Interpol website search, which he did not appear on.

“He is not on there ­— you can check it yourself now.”

Cointelegraph has checked Interpol’s website several times and has been unable to find any information related to Kwon, despite previous reports stating a red notice had been issued for his arrest.

Related: Terra co-founder in S. Korean crosshairs following Do Kwon arrest

Last week, both Kwon and Han were arrested in Montenegro after allegedly using forged Costa Rican travel documents.

Under the Criminal Code of Montenegro, the offense carries a maximum imprisonment sentence of three years.

A legal representative of Kwon confirmed that he would reportedly appeal the court’s decision to extend detention time for up to 30 days.

Meanwhile, United States prosecutors on March 23 announced that Kwon has been charged with fraud in a New York court.

Do Kwon faces fraud charges from US prosecutors hours after arrest

The Terraform Labs CEO is now facing fraud charges in South Korea, the Securities and Exchange Commission and federal prosecutors in New York.

Terraform Labs CEO Do Kwon has been charged with fraud by United States prosecutors in New York, just hours after he was reportedly arrested in Montenegro.

In a court filing signed by United States Attorney Damian Williams, the 31-year-old entrepreneur has been charged with eight separate counts, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation.

Under the first charge, conspiracy to defraud, the U.S. prosecutors claim to have jurisdiction over Kwon because he made a series of false and misleading statements during a TV interview that was transmitted to — among other places — the Southern District of New York, about the extent to which the Terra blockchain had been adopted by users.

The remaining four charges are related to a series of purportedly misleading statements about the effectiveness of the TerraClassicUSD stablecoin (USTC) to keep its peg with the U.S. dollar, as well as Kwon’s alleged involvement in trading strategies that were designed to alter the market price of USTC.

The filing comes as Filip Adzic, the minister of interior of Montenegro, reported on March 23 that an individual suspected of being the former “cryptocurrency king” was detained at the Podgorica airport with “falsified documents.”

The suspect, believed to be Kwon, was detained in Podgorica Airport with fellow business partner Hon Chang Joon while trying to fly to Dubai, Adzic stated.

In a follow-up tweet, the Montenegro Interior Ministry reported that Kwon used forged travel documents from Costa Rica.

Criminal charges in Montenegro

According to a report by Montenegro-based newspaper Pobjeda on March 23, the Basic State Prosecution Office may soon press criminal charges against Kwon and Joon for using forged travel documents from Costa Rica, which they say was first discovered by Interpol.

The criminal offense is understood to fall under Article 412 paragraph 2 of the Criminal Code of Montenegro, which carries a maximum imprisonment sentence of three years.

A luggage search also found forged Belgium travel documents along with three laptops and five mobile phones, which were taken from them, Pobjeda reported.

Related: Terra co-founder Do Kwon says he’s not ‘on the run’

South Korean prosecutors issued an arrest warrant against Kwon on Sept. 14, who faces a series of fraud charges and breaches of capital markets law in his home state. Also, Interpol on Sept. 26 issued a red notice listing for his arrest, and the United States Securities Exchange Commission filed fraud charges of its own on Feb. 16.

The charges laid against him are in relation to his alleged role in the collapse of the $40 billion Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin (USTC) last May.

Since the collapse, Kwon has reportedly moved between Singapore, Dubai and Serbia.

The South Korean foreign ministry officially canceled Kwon’s passport on Oct. 20 after he failed to surrender his passport following an October 6 order.

Magazine: SEC sues Do Kwon, Paxos ready to litigate, SBF’s VPN: Hodler’s Digest, Feb. 12-18

Breaking: Terraform Labs co-founder Do Kwon reportedly arrested in Montenegro

The former blockchain executive is wanted by Interpol for his role in the $40-billion collapse of the Terra ecosystem in May 2022.

According to a post from Filip Adzic, minister of the interior of Montenegro, an individual suspected of being Terra co-founder Do Kwon has been arrested within the territory of the Balkan nation on March 23. Since the announcement was first made, local news outlet Vijesti has confirmed that the Twitter account that made the announcement is from the minister of the interior of Montenegro and that the individual arrested was a South Korean national. 

The same day, South Korean local news outlet Yonhap News Agency said authorities confirmed based on “photo data,” alongside name, nationality and age of an identification card that the arrested individual was the same person as Terraform Labs’ CEO, Do Kwon. The former blockchain executive’s aide, Han Mo, was also reportedly arrested with him in Podgorica. However, the National Police Agency of South Korea stated it was still waiting for “fingerprint information” from Montenegrin authorities to fully verify that the arrested individuals are in fact Kwon and Mo. South Korean prosecutors previously revoked Kwon’s passports in October 2022. 

“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.”

As told by Adzic, an individual suspected of being the former “cryptocurrency king” was detained at the Podgorica airport with “falsified documents,” and authorities are awaiting official confirmation of identity. Montenegro is geographically south of Serbia and shares borders with the country. Since December 2022, South Korean prosecutors have alleged that Kwon was hiding in Serbia, where no extradition agreement exists with South Korea. On Sept. 26, 2022, an Interpol red notice was issued for the arrest of Kwon for his alleged role in the collapse of the $40-billion Luna Classic (LUNC) and TerraUSD (USTC) ecosystem in May 2022. He is also wanted by regulatory authorities in South Korea, Singapore and the United States. 

Montenegro reportedly does not have an extradition agreement with either Singapore or South Korea. However, it does have an old extradition treaty with the U.S. and has complied with extradition requests for U.S. nationals in the past. The country also communicates with Interpol on extradition matters. Kwon has spent substantial time in the U.S. in the past, but it is not clear if he is a U.S. citizen or permanent resident, or committed criminal acts against U.S. nationals, for potential extradition proceedings.

On Feb. 16, 2023, the U.S. Securities and Exchange Commission charged Kwon with “orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.” Since March, the U.S. Department of Justice has also been probing Kwon’s role in the collapse of the Terra ecosystem. However, no criminal complaints have been filed against Kwon within the territory of the United States. 

1 year after $11M LUNC bets; Do Kwon wanted, funds paid, hedge stuck on FTX

Terra Luna’s former co-founder, Do Kwon, who lost $11 million in the bet, is currently wanted by Interpol and is reportedly hiding in Serbia.

Approximately one year prior, on Mar. 14, 2022, cryptocurrency trader GiganticRebirth (GCR) invited the then co-founder of CEO of Terraform Labs, Do Kwon, in a $10 million bet that the price of Terra Luna (LUNC) would be lower than its then price of $92.4 per token one year later. The blockchain executive accepted the offer, the second in the series after the day prior, when cryptocurrency trader Algod offered a $1 million bet that LUNC would be lower than $88 per token on Mar. 13, 2023, to which Kwon also accepted, resulting in two bets worth $11 million and prize money pool of $22 million .

The funds, which totaled $22 million from all participants, were held in escrow by blockchain personality Cobie on their Ethereum address. Cobie claimed at the time, a hot wallet was given to participants “on my mobile phone while i was in the middle of africa, when i woke up there was $22m deposited.”

“i didn’t want 22m on a mobile tent while I was living in a tent amongst lions lmao.”

As told by Cobie and substantiated by blockchain data, the blockchain personality paid out the bets from the hot wallet in April 2022, shortly after the $40 billion LUNC and accompanying algorithmic stablecoin Terra USD (USTC) ecosystem imploded, with LUNC trading at fractional decimal values close to zero. However, Cobie also stated in Dec. 2022: 

“I actually paid out the bet shortly after Luna went to 0, and then bought enough Luna to hedge in case it somehow went back to $88. But I lost my hedge (custodied in FTX) so if Luna goes to $88 in the next 3 months I am fucked”

As the bet was active until mid-March of 2023, Cobie was required to hold collateral despite LUNC’s collapse, as the funds were paid out early, and conditions could differ at settlement. At the time of publication, LUNC is currently trading at $0.000124 per token.

Last Nov. 2022, cryptocurrency exchange FTX, then third-largest in the world by volume, filed for bankruptcy over allegations of misappropriating users’ funds and left the deposits of over 1 million creditors frozen. On Apr. 4, 2022, Cobie transferred the prize money and principal, worth $22 million in stablecoins, to winners GCR and Algod via FTX. The subsequent flow of funds is unclear.

On Sept. 26, 2022, Interpol issued a red notice arrest warrant for Do Kwon per the request of South Korean prosecutors over accusations of fraud relating to Terra Luna’s collapse. The former blockchain executive is reportedly hiding in Serbia, which does not have an extradition agreement with South Korea. Aside from being out $11 million from the bets, the U.S. Federal Bureau of Investigation and Department of Justice reportedly began probing Terra Luna’s collapse on Mar. 14, 2023. One month prior, the U.S. Securities and Exchange Commission charged Terraform Labs and former CEO Do Kwon with “defrauding investors in crypto schemes.”


1 year after $11M LUNC bets: Do Kwon wanted, funds paid, hedge stuck on FTX

Terra Luna former co-founder Do Kwon, who lost $11 million in two bets, is currently wanted by Interpol and is reportedly hiding in Serbia.

About one year ago, on March 14, 2022, cryptocurrency trader GiganticRebirth (GCR) invited the co-founder and then-CEO of Terraform Labs, Do Kwon, to bet $10 million that in a year the price of Terra Luna (LUNC) would be lower than its then-price of $92.4 per token.

The blockchain executive accepted the offer, the second in the series. The day before, cryptocurrency trader Algod offered a $1 million bet that LUNC would be lower than $88 per token on March 13, 2023, which Kwon also accepted. This resulted in two bets worth $11 million and a prize money pool of $22 million.

That $22 million was held in escrow by blockchain personality Cobie on his Ethereum address. Cobie claimed at the time that a hot wallet was given to participants “on my mobile phone while i was in the middle of africa, when i woke up there was $22m deposited.”

“i didn’t want 22m on a mobile tent while I was living in a tent amongst lions lmao.”

As told by Cobie, the blockchain personality paid out the bets shortly after the $40 billion LUNC and accompanying algorithmic stablecoin Terra USD (USTC) ecosystem imploded, with LUNC trading at fractional decimal values close to zero. However, Cobie also stated in December 2022: 

“I actually paid out the bet shortly after Luna went to 0, and then bought enough Luna to hedge in case it somehow went back to $88. But I lost my hedge (custodied in FTX) so if Luna goes to $88 in the next 3 months I am fucked”

As the bet was active until mid-March of 2023, Cobie was required to hold collateral despite LUNC’s collapse, as the funds were paid out early, and conditions could differ at settlement. At the time of publication, LUNC was trading at $0.000124 per token.

Last November, cryptocurrency exchange FTX — then the third largest in the world by volume — filed for bankruptcy over allegations of misappropriating users’ funds and left the deposits of over 1 million creditors frozen. On April 4, 2022, Cobie transferred the prize money and principal, worth $22 million in stablecoins, to winners GCR and Algod via FTX. The subsequent flow of funds is unclear.

On Sept. 26, 2022, Interpol issued a red notice arrest warrant for Do Kwon at the request of South Korean prosecutors over accusations of fraud relating to Terra Luna’s collapse. The former blockchain executive is reportedly hiding in Serbia, which does not have an extradition agreement with South Korea. The U.S. Federal Bureau of Investigation and Department of Justice reportedly began probing Terra Luna’s collapse on March 14, 2023. One month before that, the U.S. Securities and Exchange Commission charged Terraform Labs and former CEO Do Kwon with “defrauding investors in crypto schemes.”