‘Montenegro Detains Thief In $40 Billion Crypto Scandal’ (Worthy News-Focus)

By Stefan J. Bos, Chief International Correspondent Worthy News

PODGORICA/NEW YORK/BUDAPEST (Worthy News) – The man who allegedly defrauded investors of $40 billion in one of the biggest cryptocurrency scandals has been detained in Montenegro, officials said Thursday.

Terraform Labs company co-founder Do Kwon, 31, was detained in Podgorica, the capital, along with Hon Chang Joon while trying to fly to Dubai, Montenegro’s Interior Ministry said.

Montenegro’s interior minister, Filip Adzic, said on the social media network Twitter that “one of the world’s most wanted fugitives” had been detained at Podgorica’s airport.

Kwon and his companion allegedly used falsified Costa Rican traveling documents. The two were also found with Belgian and South Korean travel documents, the ministry said.

The Belgian papers were falsified, according to Interpol, the international police group. Police took three laptops and five mobile phones from the pair, Interior officials said.

Thursday’s detention occurred a month after the U.S. Securities and Exchange Commission sued Kwon and his Terraform Labs.

U.S. prosecutors charged him with “orchestrating multibillion-dollar crypto asset securities fraud.” South Korea also sought his arrest for securities law violations.

CRYPTO COLLAPSE

Kwon’s Singapore-based company Terraform, along with its cryptocurrencies, collapsed spectacularly in May 2022.

The value of its Terra Luna and TerraUSD tokens fell, plummeting to near zero and triggering a sell-off in major cryptocurrencies such as Bitcoin, Ethereum, and Tether.

“I am heartbroken about the pain my invention has brought on all of you,” Kwon said at the time.

He denied being in hiding to avoid justice, though there was no immediate explanation for the alleged falsified travel documents that were in his possession.

The case has underscored broader concerns about cryptocurrencies that their promotors claim operate outside government control and could lift many out of poverty.

In reality, however, millions of people have lost much and, in many cases, virtually all of their original investments over the last year as governments fight back and questions rise about the actual value of cryptocurrencies, critics argue.

‘OLD-FASHIONED’ CASH

A relatively small number of people, who, years ago, bought Bitcoin or other more established cryptocurrencies at their low entry points, became rich if they sold in time for ‘old-fashioned’ currencies or other tangible assets.

Also on Thursday, Chinese crypto entrepreneur Justin Sun, who paid a record $4.6 million in a charity auction to have lunch with U.S. investor, and crypto skeptic, Warren Buffett, denied wrongdoing.

On Wednesday, the Securities and Exchange Commission (SEC) said it filed civil charges against Sun and three of his companies in a Manhattan federal court for offering and selling two unregistered crypto tokens, Tronix, or TRX, and BitTorrent, or BTT.

The SEC also brought civil charges against eight celebrities, including “Mean Girls” comedy film star Lindsay Lohan. The regulator alleged the eight—who each had more than a million social media followers at the time—illegally promoted TRX and BTT.

According to a settlement agreement published by the SEC, Lohan was paid $10,000 to tweet about TRX. The actress and five of the other celebrities agreed to pay a total of $400,000 to settle the investigation.

The latest cases have done little to increase worldwide trust in cryptocurrencies. In recent years, Buffett has repeatedly criticized bitcoin, the most well-known cryptocurrency. But he has been more measured in his comments about the underlying blockchain technology.

“Blockchain is important. But bitcoin has no unique value at all,” Buffett told the business channel CNBC recently. “It doesn’t produce anything. You can stare at it all day, and no little bitcoins come out or anything like that. It’s a delusion, basically.”

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