South Korea’s hunt for crypto fugitive Do Kwon leads to Serbia

South Korean prosecutors believe that Do Kwon, the failed entrepreneur behind the $40bn implosion of the terraUSD and luna tokens, is hiding in Serbia, as they intensify their months-long global manhunt for the disgraced crypto king.

They are seeking to co-operate with Serbian authorities to locate and detain him, according to the Seoul Southern District Prosecutors’ Office investigating the collapse of Kwon’s cryptocurrency operator Terraform Labs.

Kwon has been charged with fraud and breaches of capital markets law in his home country after the collapse of his terraUSD and luna coins in May.

Prosecutors said in October he had transited to an unknown country via Dubai after leaving Singapore, where Terraform was headquartered. South Korea revoked Kwon’s passport in November.

Interpol has issued a red notice against Kwon at Seoul’s request. South Korea does not have an extradition treaty with Serbia, but both countries have acceded to the European Convention on Extradition.

Investors have launched class-action lawsuits against Kwon in Singapore and the US. Kwon has denied any wrongdoing, although he has apologised to the victims of his blockchain system’s collapse. He has claimed that the South Korean charges against him were not “legitimate” and were “politically motivated”.

“Despite Interpol’s red notice, it won’t be easy to detain and extradite him to South Korea,” said Kim Hyoung-joong, head of the Cryptocurrency Research Center at Korea University. “Kwon might have already fled to another country, given the lax border control in Europe.”

The main cause of the implosion of Kwon’s cryptocurrencies remains unknown, despite Korean prosecutors’ widening investigation. They have sought an arrest warrant for Daniel Shin, the co-founder of Terraform Labs, but the request has been rejected by a South Korean court.

The New York Times reported last week that US federal prosecutors were reinvestigating whether Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, and his hedge fund Alameda Research orchestrated market manipulation that led to the demise of Kwon’s twin coins.

Kwon last week published a series of tweets, revealing how FTX, Alameda and global crypto lender Genesis Trading contributed to the terraUSD/luna crisis and urged Bankman-Fried to make public the details of key transactions that led to the demise of the coins.

The collapse of FTX is also taking a toll on the South Korean crypto market as services at Gopax, South Korea’s fifth-largest crypto exchange, have been disrupted and wemix, the native token issued by Korean game developer Wemade, has been delisted from Korean exchanges.