Montenegro jails Do Kwon, accused of causing $40 billion LUNA crash

Fugitive crypto villain Do Kwon has been jailed in Montenegro for falsifying documents.

Kwon was a co-founder of Terraform Labs – a crypto outfit that tried to create a "stablecoin" pegged to the value of the US dollar. The scheme went pear-shaped in May 2022, leaving a $40 billion crater in investors' holdings.

Kwon evaded responsibility for the mess and tried to physically evade authorities, who felt he'd told fibs to attract investors and therefore wanted a word about his actions. After disappearing – and denying he was on the run – Kwon eventually emerged in Montenegro.

Kwon reportedly had a long association with a Montenegrin politician

Montenegro has some cracking coastline and dramatic mountains, but Kwon may not have gone there for the scenery: it's alleged he had a long association with a local politician and may even have funded their campaigns, and therefore felt the local judiciary may smile upon his activities – or at least look away.

In March 2023 Kwon put that proposition to the test by trying to leave the European nation. As he tried to board a plane bound for Dubai, authorities could not find records of his entry to Montenegro. The Costa Rican and Belgian passports he carried also aroused suspicions and led to his detention.

On Monday those dodgy docs earned Kwon four months in jail.

The Basic Court in Podgorica on Monday announced the sentence, adding that Kwon and another un-named Korean citizen have already spent almost three months inside and that time will be counted against their sentences.

• South Korea to treat crypto tokens and virtual assets as if they were securities
• Where in the world is Terraform Labs villain Do Kwon? Montenegro, actually
• South Korea prosecutes Terraform Labs co-founder Daniel Shin
• Infusion of $3.5bn not enough to revive Terra's 'stablecoin'

News of Kwon's confinement will be cold comfort to investors, but will interest authorities around the world – many of whom remain keen to have him explain his actions.

Regulators have waited almost a year to get his story: Kwon fled from South Korea to Singapore in the days before Terraform Labs crashed. The island nation has sued him, South Korea has issued an arrest warrant, and the United States Securities and Exchange Commission has charged him with fraud.

Kwon will emerge from Montenegro's penal system in a few weeks. Grab some popcorn, dear reader, as we await news of which jurisdiction tries to grab him next. ®