Fugitive Terraform Labs co-founder Do Kwon reportedly hiding out in Serbia

December 12, 2022, 11:11 AM UTC
Do Kwon, co-founder and chief executive officer of Terraform Labs, works on his laptop in the company's office in Seoul, South Korea, on April 14, 2022.
Woohae Cho—Bloomberg/Getty Images

Serbia has emerged as a likely location for crypto fugitive Do Kwon, the fallen 31-year-old entrepreneur facing charges in his native South Korea over the $60 billion wipeout of digital assets that he created.

The prosecutors’ office in Seoul said Monday reports placing the progenitor of the collapsed TerraUSD and Luna tokens in the landlocked Balkan nation “aren’t false.” Those reports also said South Korea is in the process of requesting cooperation from Serbia. An official at the South Korean Justice Ministry declined to comment.

Kwon’s location became unclear after authorities in mid-September issued a warrant for his arrest on allegations including breaches of capital-markets law. South Korea has stripped him of his passport and said that Kwon is the subject of an Interpol red notice

Prosecutors in October indicated that Kwon had flown to Dubai likely as a stopover to destinations unknown after exiting Singapore, where his Terraform Labs project had a base. 

The TerraUSD stablecoin was meant to have a constant $1 value via a mix of algorithms and trader incentives involving sister token Luna. The edifice blew up in May, exacerbating a $2 trillion crypto-market rout and contributing to the downfall of a range of digital-asset outfits.

Kwon has denied wrongdoing and Terraform Labs has said capital-markets law doesn’t apply to crypto tokens. Neither he nor a Terraform Labs spokesperson immediately replied to a request for comment about the latest developments.

The burning question is why Kwon would be in Serbia and what that might mean about his chances of being extradited. South Korea doesn’t have a bilateral extradition treaty with Serbia, but both nations have acceded to the European Convention on Extradition.

Exactly what sparked the implosion of Kwon’s project remains a mystery. US authorities are probing possible links to Sam Bankman-Fried, whose FTX exchange and trading house Alameda Research recently slid into bankruptcy.

The New York Times has reported that US federal prosecutors are examining whether Bankman-Fried engaged in market manipulation by orchestrating trades that led to the collapse of TerraUSD and Luna.

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