To most, running away from the law in the face of a fraud worth more than US$40 billion would sound like an impossible mission. But for the South Korean entrepreneur and, until recently, the so-called “king of cryptocurrencies” Do Kwon (real name Kwon Do-Hyung), this mission has been a reality for more than six months… Until he was found and arrested in a more or less unexpected part of the world – the Balkans.
What was the mindset of the crypto-fugitive for the past six months and how did Do Kwon end up in a jail cell in Montenegro?
A graduate of the prestigious American Stanford University, Do Kwon rose to fame in 2018 as the co-founder of Singapore-based company Terraform Labs and the Terra blockchain protocol. In 2020, the company also launched its algorithmic ” stablecoin” TerraUSD, connected to the cryptocurrency Luna.
In the years that followed, Luna and the entire ecosystem around this cryptocurrency gained enormous popularity, acquiring a huge number of investors and fans of the project, commonly referred to as “Lunatics”.
But when TerraUSD began to fall in May of last year, the same thing happened to the cryptocurrency Luna. The collapse of this ecosystem also had a domino effect on many other cryptocurrencies in the market, causing losses worth $40 billion for many investors and people who lost their life savings when the project collapsed.
As a result, the indictment of Do Kwon by US authorities followed, due to the alleged fraud he committed regarding aspects of the Terra blockchain and the operation of its technology.
According to the indictment, Do Kwon also made a series of false and misleading statements in a series of interviews and appearances on social networks, in an attempt to gain as many users as possible.
Simultaneously requested by the USA, South Korea and Singapore
In September last year, South Korea first issued an arrest warrant for Do Kwon, while Interpol issued a warrant for him at the same time. He, on the other hand, constantly insists on social networks that he is not on the run. In a way that might be seen as nothing short of arrogant, the South Korean entrepreneur also invites “policemen all over the world” to come to a conference personally organized by him.
Although there is an abundance of mysteries surrounding Do Kwon’s arrival in the Balkans, what is known so far is that his connections with the authorities in the region begin sometime in December 2022, when the first rumors appear that he is located in the region, i.e., Serbia. It is during this period that Do Kwon stops all activities on social networks and shuts down his online presence.
For the next four months, his whereabouts remain unknown, and all the public knows about him is based on rumors that he is situated somewhere in the Balkans. At the end of March this year, however, the rumors turned out to be partly true, after Do Kwon and his associate Han Chang-Joon, former director of the South Korean payment application Chai, were arrested at the airport in Podgorica on March 23, from where they were supposed to be traveling to Dubai.
What Montenegrin authorities found suspicious was that the two South Koreans – currently wanted by the US, Singapore and South Korea – tried to leave the country using Costa Rican passports. The Montenegrin authorities announced at that moment that the two refugees had no recorded entry into the country.
Company for crypto services and properties in Serbia
Pending the official results of the investigation into Do Kwon’s stay in the Balkans, sources say that for some time he had an alleged agreement with the authorities of one of the countries in the region, i.e., where he first arrived – and according to what is known, it is for Serbia. Immediately after the arrest of Do Kwon in Montenegro, information appeared that he had already opened a company in Belgrade and been running it for some time, which, according to our sources, was supposed to grow into a consulting company for crypto services.
According to information from the Serbian business register, the company Codokoj22 was opened in October 2022, with an address in the center of Belgrade and with Do Kwon as the owner.
In addition, Do Kwon’s associate, Han Chang-Joon, has been registered since December as the owner of a luxury apartment worth more than 2 million euros in the elite Belgrade neighborhood of Dedinje. What is also interesting is that the apartment is located in proximity to the South Korean embassy – and was bought at a time when representatives from the South Korean prosecutor’s office were traveling to Serbia to track him down.
However, the cooperation with the Serbian authorities during that period did not result in progress in the investigation and locating him. According to our sources, Do Kwon also worked to establish contacts with the local crypto community and participate in the development of new crypto projects.
While this may have been Do Kwon’s grand plan – to return to the crypto scene via one of the Balkan countries, what he didn’t foresee was the agility of the Balkan authorities when it comes to fake documents.
In Montenegro, he is accused of falsifying documents
The Montenegrin authorities received information that Do Kwon is a wanted person the moment he offered his passport to be checked.
The biggest reason for his downfall was the Costa Rican passport with which he tried to travel from Podgorica to Dubai on a private flight from the Alliance Jet company. In a blink, charges of forgery have been brought against him and his accomplice Chang-jun. In addition to the Costa Rican passport, forged Belgian passports were also found in their luggage. For the crypto-refugee, Montenegro is now facing two extradition requests – from the US and South Korea. But according to the local authorities, the extradition will happen only after the completion of the local criminal procedure, which is the falsification of documents.
Just a year ago, Do Kwon was considered a high-ranking entrepreneur and enjoyed the support of giant companies in the industry, but that is not the case anymore, not even in the Balkans. In addition, the detailed investigation will also show what his plans for the region actually were and whether he hoped that the local countries might be fertile ground for new crypto scams.