The South Korean entrepreneur is accused of having destabilized the international cryptocurrency market. Authorities in Montenegro handed him over to the FBI on Tuesday.
The tarmac at Podgorica airport, capital of Montenegro, will surely leave Do Kwon with bad memories. Escorted by Montenegrin police officers, the South Korean cryptocurrency entrepreneur boarded a plane this Tuesday, December 31, heading to the United States to be “delivered to the appropriate law enforcement authorities of the United States of America and agents of the Federal Bureau of Investigation (FBI)”the country’s Interior Ministry said in a statement. It was on this same tarmac that his run of several months ended in March 2023 as he prepared to board for Dubai, in possession of a false Costa Rican passport and Belgian documents.
From tycoon to fugitive
Until 2022, however, Do Kwon was a successful entrepreneur. After a brief stint at Apple and Microsoft, this Stanford graduate engineer returned to South Korea to found his start-up called Anyfi. This communication platform using blockchain is quickly growing, helped by several hundred thousand dollars in aid allocated by the South Korean government. An investigation published in 2022 by the media SBS News revealed that the start-up would have benefited from a conflict of interest, the parent of a co-founder being at the head of the government incubator having allocated nearly 600,000 dollars (around 578,000 euros) to small businesses.
A few years later, driven by the success of this first business, Do Kwon founded the cryptocurrency platform Terraform and the associated virtual asset Terra/Luna. The goal behind this attempt: to build a system that could rival Ethereum, another very popular cryptocurrency, in terms of scale. But the affair comes to an end. In the spring of 2022, the cryptocurrency collapsed, erasing more than 80 billion dollars (around 77 billion euros) in value while the virtual tokens were liquidated by panicked stock traders. The earthquake is such that it triggers a broader crash destroying two-thirds of the value of the entire cryptocurrency sector.
A compromised Montenegrin candidate
Wanted by Seoul and Washington because of his alleged role in a fraud linked to the bankruptcy of his company, the 33-year-old man slipped through the cracks for several months until he was caught in the Balkans. Coming three months before the legislative elections in Montenegro, his arrest was used in the campaign by the outgoing Prime Minister, Dritan Abazovic, accusing an opponent, Milojko Spajic of having maintained links with Do Kwon. Local media revealed in June 2024 that Milojko Spajic had invested in the South Korean entrepreneur's company Terraform Labs in 2018, sparking new controversy.
Last week, Justice Minister Bojan Bozovic finally issued a decision approving his transfer across the Atlantic after a year and a half of legal decisions and reversals. Do Kwon's Montenegrin lawyers denounced the decision as contrary to European conventions on extradition, saying they will appeal to the country's constitutional court and the European Court of Human Rights. In the meantime, Do Kwon has been taken into custody by the FBI.
