South Korean Officials Traveled to Serbia to Locate Terra’s Do Kwon

A group of South Korean officials has traveled to Serbia in a bid to locate Do Kwon, the co-founder of Singapore-based Terraform Labs, the parent company of crashed stablecoin TerraUSD.

According to a Tuesday report by Bloomberg, a team of South Korean officials went to Serbia last week to seek help in the hunt for Do Kwon. The prosecutor’s office in Seoul has reportedly confirmed the news, noting that a senior Justice Ministry official also accompanied the delegation.

In early December, South Korean prosecutors claimed Do Kwon was “in hiding” in Serbia, asking the European nation’s police force to hand him over to them. The prosecutors said he had moved to Serbia via Dubai in September, after leaving South Korea for Singapore at around the time of the crash.

Notably, Kwon’s South Korean passport has been revoked, which – in theory at least – means he is unable to travel abroad from his current location. An arrest warrant has been issued for him and a number of other Terraform executives and Interpol has issued a Red Notice, calling upon international police officers to arrest Kwon.

Kwon is wanted on charges of violating the Capital Markets Act and committing fraud, charges that he denies and has called “politically motivated.” But thus far, he has neither confirmed nor denied the suggestion that he has taken up residence in Serbia.

Some experts had previously claimed that Serbia could be a potential hiding spot for Kwon because it has never signed an extradition treaty with South Korea. Without this, experts say South Korean prosecutors may be in a tight spot. 

“In order for South Korean prosecutors to secure an arrest, Serbia must issue an extradition order, and extraditions need to be mutually beneficial. Serbia is still an unprecedented nation in this regard,” Seung Jae-Hyeon, a researcher at the Korea Criminal Justice Policy Institute, said in December last year. 

Kwon is the co-founder and CEO of Singapore-based Terraform Labs, the parent company of crashed stablecoin TerraUSD and cryptocurrency Luna. The TerraUSD stablecoin was meant to have a constant $1 value via a mix of algorithms and trader incentives involving a sister token, Luna.

However, the so-called algorithmic stablecoin lost its dollar peg in May last year after a wave of sell-offs hit the crypto market. While Terraform Labs managed to partially repair the peg by purchasing $2B UST, the continued sell-off drained those funds, hyperinflated UST’s sister token LUNA, and crashed the price of both LUNA and UST.

The unprecedented crash of the Terra ecosystem wiped out around $40 billion from the crypto market, delivering huge losses to millions of investors who put in all their life savings in the token.