Do Kwon: A crypto fugitive’s very public life while on the run

SAN FRANCISCO – Not long after the South Korean government issued a warrant for his arrest, Do Kwon, a cryptocurrency entrepreneur who became a fugitive, joined a live stream with two popular crypto podcasters.

They had arranged for Kwon to speak alongside Martin Shkreli, a former pharmaceutical executive who was sentenced to seven years in prison for fraud.

“Hey, Do,” Shkreli said on the stream last November. “I just wanted to let you know that jail’s not that bad. It’s not the worst thing ever.”

Kwon smiled and nodded. “Good to know,” he said.

On Thursday, Kwon, 31, was arrested in Podgorica, the capital of Montenegro, as he and a travel companion tried to board a private flight to the United Arab Emirates (UAE) city of Dubai. They were apprehended after using forged Costa Rican passports, according to the authorities, and they were also carrying travel documents from Belgium that appeared to be falsified.

The arrest was the culmination of a remarkable tale of international intrigue and crypto industry chutzpah. Kwon became a target of criminal investigators in at least three countries after two cryptocurrencies issued by his company, Terraform Labs, collapsed virtually overnight.

The crash set off a market meltdown that tanked the prices of popular digital coins such as Bitcoin and Ether and sent the crypto industry into crisis. In just a few days, Kwon went from industry luminary to industry villain. Some investors in his virtual currencies lost their life savings.

After his business collapsed, Kwon travelled around Europe and Asia, from Singapore to Serbia to Montenegro, while insisting on Twitter that he was not “‘on the run’ or anything similar”.

Even as the global authorities sought his arrest, Kwon gave interviews to reporters and podcasters and tried to revive his crypto business with a new digital coin. In a brief call with The New York Times early in March, Kwon said he had not “declined requests” to share his location with the authorities.

“They obviously know where I am,” he said.

His arrest is now poised to set up a battle over his extradition. On Thursday, federal prosecutors in the Southern District of New York charged Kwon with eight counts of fraud. The authorities in his native South Korea have also accused him of financial crimes.

South Korea plans to “proceed with the extradition process in accordance with the law and international agreements”, the country’s Ministry of Justice said in a statement on Friday.

A year ago, Kwon was one of the richest and most powerful figures in the crypto industry. After graduating from Stanford University with a degree in computer science, he started Terraform Labs, which issued two closely linked digital currencies: TerraUSD, a stablecoin with a price of US$1, and Luna, a more traditional cryptocurrency with a fluctuating value.

TerraUSD was designed to maintain its US$1 value through financial engineering that connected it with Luna. The coins became wildly popular, and the value of all the Luna in circulation climbed to US$40 billion (S$53.3 billion) as the crypto market boomed in 2021 and early 2022.


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