Kwon Do-hyung, who is believed to be the CEO of Terraform Labs, was arrested at the airport while trying to escape from Montenegro to Dubai. At the time, it was known that Kwon was in possession of a forged passport.
Arrested in Montenegro
: On the 23rd (local time), Montenegro’s Interior Minister Philip Adzik tweeted, “A person suspected of being the world’s most wanted person, Do-hyung Kwon, has been arrested in Podgorica, the capital of Montenegro.” We have arrested a Korean suspect who was in possession of it.”
Later, the Montenegrin Ministry of Interior explained that Kwon and one other person possessed forged Costa Rican and Belgian passports at the airport, and that they were arrested while trying to board a flight to Dubai.
In the end, Mr. Kwon was arrested after about a year on the run.
On the 12th, the prices of various virtual assets such as Bitcoin are displayed on the electronic display board of the Bithumb customer center in Seocho-gu, Seoul. Recently, as the stablecoin ‘Tera’ issued by Terra, a Korean blockchain company, collapsed for the third day, the sister coin ‘Luna’ is also continuing to plummet by nearly 95% compared to early May. 2022.5.12/News1 ⓒ News1 ◇ In April of last year, worldwide media headlines were decorated.
: It was in April of last year that Mr. Kwon stood out in the global cryptocurrency world.
At the time, after Bloomberg reported that Kwon, who co-founded Terraform Labs, a developer of cryptocurrency Terra (UST) and Luna, became a giant in the global cryptocurrency (virtual currency) market, he quickly emerged as an international figure in the cryptocurrency world.
Bloomberg introduced Mr. Kwon in detail with a special article titled, “CEO Kwon went from being the king of Luna to becoming the world’s most notable bitcoin whale.”
He surprised the world by purchasing more than 1.5 billion dollars (approximately 1.85 trillion won) of Bitcoin to support the value of UST. He plans to buy up to 10 billion dollars (about 12.4 trillion won) of bitcoin.
UST is a stablecoin whose value is fixed 1:1 with the dollar (a coin whose value does not fluctuate). UST’s market capitalization exceeded $17 billion (approximately 21 trillion won), ranking third in stablecoin market cap following Tether (USDT) and USD Coin (USDC). It is the 8th largest cryptocurrency by market cap.
Other stablecoin issuers hold dollar bonds or notes as reserve assets to maintain the 1-to-1 dollar peg.
However, UST holds cryptocurrency as a reserve asset. The dollar peg (fixed) is maintained through a relationship with the cryptocurrency ‘Luna’, whose value fluctuates.
As UST ranked third among stablecoins by market cap, Michael Novogratz, chairman of Galaxy Digital, who can be said to be a cheerleader in the global cryptocurrency world, became an enthusiastic fan of Kwon and Terra to the point of getting a tattoo of Luna.
He even revealed on Twitter that he had Luna tattooed on his body, saying, “Kwon Do-hyung is a genius.”
Ultimately, the possibility of success is not high, but Bloomberg evaluated that he has already become a giant in the cryptocurrency world just by being talked about by the population to this extent.
◇ 52 trillion won damage due to Terra incident
: After receiving the attention of the world media like this, he became a criminal in an instant when the Terra incident occurred.
The Terra Crisis occurred in May 2022. When a ‘bank run’ (large-scale deposit withdrawal) occurred, such as UST, a stablecoin issued by Terra in Korea, plummeting by 70% and sister coin Luna by 95%, all cryptocurrencies around the world collapsed at once.
The Terra Crisis had a huge impact on the cryptocurrency world. Experts estimate that the cryptocurrency world lost at least $40 billion (about 52 trillion won) in the Terra crisis. Since then, Bitcoin has not been able to recover its former majesty until now.
On the 19th, the Seoul Southern District Prosecutor’s Office, where the joint investigation team for financial and securities crimes is located. Justice Minister Han Dong-hoon is predicting that the first investigation of the joint financial and securities crime investigation team, which was revived on the 18th, will be the virtual asset Terra and Luna collapse case. 2022.5.19/News1 ⓒ News1 ◇ Nickname of Elizabeth Holmes in the crypto world
: Since then, he has been nicknamed the ‘Elizabeth Holmes of cryptocurrencies’.
Elizabeth Holmes, the founder of the medical company ‘Theranos’, dreamed of being Steve Jobs in the medical field, but turned out to be a scammer and has recently been called a synonym for Wall Street scammers.
When the Terra incident broke out, the Securities and Exchange Commission (SEC), the US securities regulatory authority, also started an investigation into Mr. Kwon. The Korean prosecutors also launched an investigation into him on charges of violating the Capital Markets Act.
In an instant, he went from being a hero in the cryptocurrency world to a mediocre criminal.
He is known to have been hiding in Singapore, avoiding investigations by investigative authorities in each country, and recently moved his hiding place to Eastern Europe. Korean prosecutors had been tracking him steadily.
◇ Stealing 10,000 Bitcoins
: He was also recently in the spotlight of international news. It made headlines in economic news around the world with the news that it stole 10,000 bitcoins and cashed out about 130 billion in Swiss banks.
On February 17, Bloomberg reported, citing the US SEC, that Mr. Kwon stole 10,000 bitcoins, cashed them out, and deposited them in a Swiss bank.
The SEC revealed that Mr. Kwon stole about 10,000 bitcoins from the Terra ecosystem and cashed them out from time to time, and deposited the cashed funds in a Swiss bank.
The SEC added that from June 2022 to the present, Mr. Kwon withdrew more than $100 million (about 130 billion won) in cash from Swiss banks.
The SEC formally indicted Kwon on charges of violating the Securities Management Act, saying he misled American investors.
Cinderella, who was once called a cryptocurrency genius, fell into a rare scammer, and was eventually arrested after about a year of escape.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.