Terra USD was a crypto asset security referred to as an "algorithmic stablecoin" that supposedly maintained its peg to the U.S. dollar by being interchangeable with Luna, another of Do Kwon's crypto asset securities. (illustrative photo)
The former CEO and co-founder of cryptocurrency company Terraform Labs has been captured in Montenegro, the country’s interior minister said on March 23.
Do Kwon, who is suspected in the loss of investments worth more than $40 billion, was detained at the Podgorica airport with falsified documents, Interior Minister Filip Adzic said.
"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," Adzic said on Twitter . "We are waiting for official confirmation of identity."
Do Kwon is wanted by the United States, South Korea, and Singapore, Adzic said.
He stands accused of "orchestrating a multi-billion dollar crypto asset securities fraud," according to the U.S. Securities and Exchange Commission (SEC).
"We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and Terra USD," SEC Chairman Gary Gensler said in a statement in February.
Terra USD was a crypto asset security referred to as an "algorithmic stablecoin" that supposedly maintained its peg to the U.S. dollar by being interchangeable with Luna, another of Kwon's crypto asset securities, the SEC said.
"We also allege that [Terraform and Kwon] committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors," he added.
An arrest warrant was issued by South Korea in September after Terraform Labs and its cryptocurrency crashed in May.
The arrest warrants named several people linked to the Terra USD and Luna cryptocurrencies, the BBC reported.
South Korean prosecutors previously asked Interpol to issue a red notice for Kwon, saying he refused to cooperate with their probe into the crash.
Many investors lost their life savings when Luna and Terra USD collapsed, falling to a value of near zero. The fallout from the collapse of Terraform Labs also affected the wider crypto market.