Do Kwon is 31 years old. He had been on the run for 10 months. Wanted in 195 countries after the publication of an Interpol “red notice”. Founder of the TerraLabs cryptocurrency platform, he was arrested Thursday, March 23 at the airport of Podgorica, the capital of Montenegro in the company of its former financial director Hon Chang Joon. The two men were in possession of false documents from Costa Rica. And since their arrest, a shallot race has started to obtain their extradition. South Korea, Do Kwon’s home country, is looking for him for violating financial market rules.
South Korea was the first to draw. Seoul Prosecutor’s Office announces the rapid sending of an extradition request to Montenegro. But the South Korean press wonders if Seoul will win because other countries are also calling for Do Kwon. There is Singapore, where he took refuge after fleeing South Korea last May. And the United States, which issued on Thursday evening, eight charges against the 30-year-old: stock market fraud, online fraud, organized gang fraud. For now, Do Kwon and his sidekick, still seem to find each other in a police station in Podgoricaand wait for the arrival of a South Korean translator, which does not necessarily run the streets in Montenegro.
37 billion losses
Do Kwon has become one of the most wanted men on the planet because he is suspected of concealing the true workings of his cryptocurrency platform and deriving illegal personal enrichment from it. In May 2022, this platform, Terra Labs, collapsed in a matter of days. The two virtual currencies on which it was based, Luna and Terra, plunged after a rise in US interest rates. But when I say dive, it’s dive: the Luna has gone from a value of 100 dollars, to a value of 1 cent: 10,000 times less.
Net loss for investors: 37 billion euros, yes 37 billion. Do Kwon then took the tangent, not without having taken care if we are to believe the American stock market policeman to withdraw for his personal use the equivalent of 10,000 bitcoins, or approximately 250 million euros at the current price. The case struck a chord, especially since Do Kwon had guaranteed investors that its cryptocurrencies were stable, indirectly backed by the dollar. There was obviously deception on the goods.
The cryptocurrency plunge
And since this scandal, the universe of cryptocurrencies has gone from bad to worse. Bitcoin has lost more than half of its value in the last 15 months: the price has fallen from 64,000 euros to 26,000. In the wake of Terra Labs, several companies collapsed: the FTX platform placed in receivership (it was the second largest cryptocurrency exchange in the world), the investment fund Three Arrows Capital in Singapore, and also other exchanges like BlockFi or Celsisus, serial bankruptcies. Many suspicions of fraud are aimed either at the managers of these companies or at crooked intermediaries. Do Kwon is therefore a bit of a symbol of this hard landing of the “wonderful and somewhat illusory world” of cryptocurrencies.