Do Kwon, the infamous title behind Terra’s collapse, was reportedly underneath arrest by Montenegro’s watchdogs at Podgorica Airport on March 23. The information broke out amid the Arbitrum itemizing taking the neighborhood by storm.
A Twitter account believed to be Filip Adzic’s, minister of the inside of Montenegro, stated that Montenegro’s watchdogs arrested one of the vital needed, Do Kwon – co-founder of Terraform Labs.
Native information outlet Vijesti later confirmed that it was the official account of the minister.
To wit,
“Montenegrin police have detained an individual suspected of being one of the vital needed fugitives, South Korean citizen Do Kwon, co-founder, and CEO of Singapore-based Terraform Labs.”
Busted in Montenegro
The South Korean police have confirmed to the Yonhap information company that the particular person underneath arrest in Montenegro’s capital’s airport was Do Kwon, the founding father of TerraForm Labs. He was arrested with faux paperwork.
Traders worldwide have been trying to find Do Kwon’s whereabouts for the reason that Terra-LUNA catastrophe.
Earlier stories prompt that he could also be hiding in Serbia or Dubai, however South Korean prosecutors issued an arrest warrant for him final 12 months and enlisted Interpol’s assist to find and arrest him.
In February, the US Securities and Change Fee (SEC) filed a lawsuit towards Do Kwon and Terraform Labs over a $60 billion securities fraud involving LUNA and the TerraUSD algorithmic stablecoin.
The collapse of one of many largest crypto empires run by Do Kwon in Might 2022 as a result of unstable UST and LUNA tokens induced billions of {dollars} in losses for traders worldwide, contributing to the collapse of the Three Arrows Capital (3AC) fund and inflicting asset liquidation.
The occasion additionally eroded investor confidence, not directly bringing down many cryptocurrency exchanges and different trade platforms.
Regardless of South Korean authorities asserting that Do Kwon is needed for violating capital market legal guidelines since mid-September 2022, his actual whereabouts have remained unknown, even after an Interpol pink discover.
In the meantime, Do Kwon has denied any wrongdoing, and Terraform Labs, the corporate behind Terra, has argued that present market legal guidelines don’t apply to cryptocurrencies.
As well as, the US authorities are reportedly investigating Do Kwon’s relationship with Sam Bankman-Fried, the founding father of FTX trade and Alameda Analysis which additionally collapsed final 12 months.
Will He Spill The Beans?
Within the wake of Kwon’s arrest, the worth of Terra (LUNA) has taken successful, dropping by 8%. Surprisingly, the worth of Terra Traditional (LUNC), which is a rebranding of the unique LUNA, has additionally plummeted by 4%.
It’s value noting that LUNA and LUNC are completely different entities, with LUNA being a tough fork that has separated from Do Kwon. The collapse of Terra serves as a reminder of the potential penalties of fraudulent exercise within the cryptocurrency world.
The demise has raised the problem of tighter laws for stablecoins to guard traders. It has additionally made crypto traders cautious of decentralized finance that features token buying and selling, borrowing, and lending operations, just like the mannequin Kwon constructed.
Within the US, stablecoins with algorithms like TerraUSD have been banned for 2 years, and in South Korea, curiosity in cryptocurrencies has dwindled.
The state of affairs surrounding Do Kwon and Terra has drawn the eye of regulatory our bodies and the broader cryptocurrency neighborhood, highlighting the continued challenges of regulating a quickly evolving and sophisticated trade.
As cryptocurrency continues to achieve reputation and appeal to extra traders, regulators are going through mounting stress to develop clear and constant frameworks for oversight and enforcement.
Nevertheless, the decentralized nature of cryptocurrency, coupled with its world attain and sophisticated technical infrastructure, poses vital challenges for regulators in search of to successfully monitor and regulate the trade.
Furthermore, the query of whether or not or not present legal guidelines and laws apply to cryptocurrencies stays a contentious challenge, with completely different jurisdictions taking various approaches to regulation.
