Fugitive Terraform Founder Allegedly Arrested in Montenegro

A person believed to be Terraform Labs co-founder Do Kwon, who is accused of alleged cryptocurrency securities fraud, was apprehended at an airport in Montenegro Thursday, according to a tweet from the country's interior minister.

Officials in Montenegro are awaiting the identification of the man they've arrested, who is suspected of orchestrating a $40 billion cryptocurrency failure last May.

Kwon was wanted by officials in the U.S., South Korea and Singapore and has been on the run since late last year after he was accused of securities fraud. Last month, the U.S. Securities and Exchange Commission charged Kwon with securities fraud, alleging he illegally sold securities.

Stablecoin TerraUSD was pegged to the U.S. dollar at a 1-1 ratio and was maintained through LUNA, another cryptocurrency. An algorithm would make conversions between LUNA and UST to maintain price equilibrium. A market plunge in the value of LUNA and waning investor confidence in TerraUSD put pressure on the algorithms that maintained the peg, and it couldn't keep up.

Nearly $18 billion of market value was lost when Terra and LUNA collapsed nearly a year ago, and total losses could reach as high as $40 billion, according to the SEC.

Singapore, where the company was based, and Kwon's native South Korea were both involved in the search for him.

The failure of Kwon's TerraUSD was the first tremor of turmoil in the crypto sector. The crypto market still hasn't recovered from the dive in prices that followed and Sam Bankman-Freid's FTX melted down in a flurry of legal action.

U.S. regulators have been racheting up the pressure on crypto firms in recent months, reigniting the argument over whether crypto is a security that falls under the SEC's jurisdiction.