The founder of Terraform Labs, Do Kwon, is reported to have been arrested in Montenegro. A tweet by the country’s minister of interior, Filip Adzic disclosed.

Kwon has been the target of several investigations and was even on Interpol’s red notice after the collapse of stablecoin terraUSD (UST) estimated at slightly over $40 billion in market value.

According to the minister’s tweet which was also sighted by Investors King, Do Kwon was called “one of the world’s most wanted fugitives.” He was alleged to be travelling under a false name with fake documents.

Kwon had earlier claimed on Twitter that he was not “on the run,” but refused to disclose his whereabouts due to worries about his personal security.

In September 2022, South Korean authorities issued an arrest warrant for Mr Kwon stating that his company Terraform Labs had violated capital market rules.

Similarly earlier this year, US regulators accused Mr Kwon and his company Terraform Labs of “orchestrating a multi-billion dollar crypto asset securities fraud”. 

The charges specifically cite that Kwon lied to customers and investors in interviews and social media posts about how many people were using the Terra blockchain ecosystem. SEC has also alleged that Kwon has been living large after transferring 10,000 bitcoin to an unnamed Swiss bank.

Meanwhile, Interpol has confirmed the arrest of Do Kwon, stating that his arrest was confirmed through a fingerprint match. Do Kwon has been on the watch list of the International police following his complicity in the collapse of the Terra Ecosystem. He is expected to be extradited to the United States where the court has declared him wanted. 

About Do Kwon 

Kwon, a South Korean national, founded the blockchain platform behind the TerraUSD stablecoin and its sister coin Luna. Both coins lost their value in a matter of days in May 2022, wiping about $40 billion from the crypto market and setting off panic across the cryptocurrency industry. 

Tether, the cryptocurrency firm behind the USDT stablecoin, has estimated that it will earn $700 million in profit for Q1 2023, surpassing the $1 billion mark in excess reserves for the first time.

Paolo Ardoino, Tether’s chief technology officer, revealed the figures in an interview with CNBC, adding that the company plans to use the excess reserves to further capitalize its stablecoin.

Tether’s USDT stablecoin is pegged one-to-one with the U.S. dollar and is backed by real-world assets, including fiat currency and U.S. Treasurys, Investors King reports.

The stablecoin is used by traders to move in and out of different cryptocurrencies without the need to convert money back into fiat currencies.

In recent years, stablecoin issuers have faced criticism for not being transparent enough about the assets they hold in reserve to back their digital currency. Tether initially held commercial paper, or short-term, unsecured debt issued by companies, but later moved into U.S. Treasurys, which are considered a more stable and reliable asset.

The company produces attestations, reports produced by an auditor, to attest to the company’s reserves and the assets it holds.

Tether makes money from various fees, investments in digital tokens and precious metals, and issuing loans to other institutions. The value of all the USDT in circulation has grown substantially this month, thanks in part to the collapse of Silicon Valley Bank, which has boosted investor confidence in Tether.

Despite Tether’s success, the company has faced ongoing scrutiny over its reserves and financial stability. Ardoino defended the company’s record, questioning why people are still questioning its reserves, even after traditional lenders like Credit Suisse have collapsed. He argued that Tether is making money while banks are failing, making it a safer option for investors.

The issuer of stablecoin, USDC has dismissed the purported airdrop as fake, stating that the Twitter account of its Chief Strategy Officer was hacked.

The account posted a link appearing to offer holders of the stablecoin USDC a “one-time bonus” of free cryptocurrency. 

Investors King learnt that the hacked account was used to send a series of tweets appearing to address the stablecoin’s recent move away from its dollar peg. One of the tweets authored by the account which is no longer visible stated that Circle “will be distributing a one-time bonus of USDC to all existing holders. 

“This bonus is our way of thanking you for your continued support and trust in USDC,” the tweet partially read. 

However, a link in the tweet which takes users to a website where they will input their wallet details looks suspicious. Prompting some Twitter users to question the authenticity of the link.

Speaking on Wednesday, a spokesperson for Circle however clarified that the Twitter account of the company’s Chief Strategy Officer, Dante Disparte has been “taken over by scammers”. 

Similarly, the company tweeted to protect unsuspecting people stating that “Any link to offers are scams. We are investigating the situation and taking action accordingly,” the tweet read. 

It could be recalled that earlier this month, USDC lost its $1 peg due to the imbroglio that led to the collapse of Silicon Valley Bank. The company revealed it has nearly 8% of its $40 billion in reserves tied up at the collapsed bank. 

Although the stablecoin has regained its position, it, however, traded below $0.87 last Saturday, a situation that has led to a clash of confidence among investors. 

Meanwhile, Bitcoin custodian and licensed private bank Xapo Bank has partnered with Circle to integrate USDC as an alternative to SWIFT. Xapo Bank says that the new feature allows its members to bypass the cumbersome and expensive SWIFT payment system.