Fugitive Crypto Entrepreneur Do Kwon Arrested in Montenegro
Fugitive crypto entrepreneur Do Kwon has been arrested in Montenegro. He faces a hefty $4.5 billion settlement with the U.S. Securities and Exchange Commission (SEC) following the collapse of his company Terraform Labs' cryptocurrency, LUNA, and stablecoin, UST.
Kwon, who founded Terra and UST, fled to Montenegro and was apprehended at Podgorica Airport with a forged passport. He has been sentenced to four months in prison for document forgery and is under restricted movement awaiting extradition.
The SEC's penalty includes $3.5 billion in restitution, over $460 million in interest, and a $420 million civil penalty. Kwon is personally responsible for paying about $200 million of this amount. The SEC considers this one of the largest securities frauds in U.S. history.
Terraform Labs is barred from buying or selling cryptocurrencies and tokens, including those part of the Terra ecosystem. The SEC's fine exceeds the assets left in Terraform Labs, estimated to be around $150 million.
The collapse of Terra and UST in 2022 wiped out around $40 billion in value and triggered the implosion of the FTX exchange. Kwon's arrest and the SEC's penalty mark a significant step in holding accountable those responsible for the massive losses suffered by investors.
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