Montenegrin prime minister found to have invested in Do Kown's cryptocurrency

Finance

Published: 19 Jun. 2024, 14:38 Updated: 19 Jun. 2024, 18:57

Montenegrin prime minister found to have invested in Do Kown's cryptocurrency

Montenegro's prime minister, Milojko Spajic, speaks at a press conference during a summit of leaders of the Western Balkans and the European Union in Montenegro on May 16. [REUTERS/YONHAP]

Terraform Labs founder Do Kwon, currently detained in Montenegro, has once again been thrust into the center of a political scandal with the discovery that the incumbent Montenegrin prime minister was one of the early investors in the cryptocurrency company behind the massive collapse of TerraUSD and Luna in 2022.

A U.S. court document filed by the Securities and Exchange Commission (SEC) revealed that Prime Minister Milojko Spajic, who took office in October of last year, invested $75,000 in Singapore-based Terraform Labs in April 2018 to acquire 750,000 Luna coins, according to a report from Vijesti, a Montenegrin media outlet, Tuesday.

The court document listed 81 individuals and legal entities that made investments in the failed cryptocurrency firm from 2018 to 2021.

Terraform Labs co-founder Do Kwon is escorted by police officers in Podgorica, Montenegro, on March 23. [REUTERS/YONHAP]

Founded in April 2018, Terraform Labs was behind the cryptocurrencies Luna and TerraUSD, which once reached $2 billion in market cap as the latter became the fifth-largest stablecoin in 2021 before both tokens collapsed catastrophically in May 2022. The Terra-Luna crash is estimated to have eliminated nearly $40 billion of market value.

Spajic previously claimed that Das Capital SG, a Singaporean company he worked for from 2017 to 2020, invested in Terraform Labs and fell victim to the fraud scheme, responding to accusations that he received funds from Kwon ahead of the general election last year.

However, the SEC document reportedly revealed that Spajic made the investment himself, not through a legal entity, raising suspicion of false clarification.

Whether he profited from the Luna coin investment is yet to be known.

Kwon, the co-founder of Terraform Labs, was arrested in Montenegro last March for holding a forged passport after months on the run. The disgraced crypto mogul recently agreed to a settlement with the SEC totaling $4.47 billion, including penalties for his company.

Kwon is also facing charges in Korea, which is seeking his extradition along with the United States, but his destination is yet to be decided as the Montenegrin top court overturned a lower court decision to extradite the Korean national home in March.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]