Do Kwon, the fraudster behind the failed stablecoin project Terra, was arrested in March. A Korean national who studied at Stanford and based his operations out of Singapore, Kwan had been on the run, using a falsified Costa Rican passport in hopes of reaching Dubai. But when law enforcement finally caught up to him, they nabbed the crypto baron in the most unlikely location: the tiny Balkan nation of Montenegro.
The news puzzled many crypto watchers as Montenegro is not a stop on the conference-heavy blockchain circuit, and few would be able to identify the coastal nation—which lies north of Albania—on a map. But those familiar with the country’s political affairs wouldn’t have been less surprised to discover that Do Kwon had chosen the Adriatic statelet as a hideout.
In recent years, influential figures in the country —long known as a mecca for organized crime—have taken a keen interest in digital currencies and have been trying to build its profile as a crypto-friendly venue. This effort has already borne some fruit.
Most notably, Montenegro awarded citizenship to Vitalik Buterin, the Russian co-founder of Ethereum, who posed for a picture holding its passport. A government finance minister at the time, Milojko “Mickey” Spajic, took credit for the photo-op.
According to news reports at the time, Spajic had invited a group of global crypto experts to visit Montenegro in the belief that they could help develop the country’s economy by attracting investments and creating new, high-paying jobs. But this month, new reports allege that Kwon—who has been in the Balkans for months—had helped finance the political party that Spajic co-founded, Europe Now.
The Montenegrin government has publicly declared that Kwon, who is currently under house arrest, has ties to Spajic. It cited a letter from Kwon to the outgoing prime minister, Dritan Abazovic, in which he claimed that the pair were business partners, and that he donated money to Europe Now’s 2022 local election campaign and to its presidential campaign earlier this year, in which the party’s candidate emerged victorious.
The allegations have set off a political bombshell, as Montenegro holds parliamentary elections this Sunday. Spajic is standing in that election and was, until Tuesday, one of the favorites to become the country’s new prime minister. His opponents have called on the Special State Prosecutor’s Office to investigate whether the assertions laid out in the letter are true. On June 7, the Europe Now party pushed back, alleging that allegations tying the party and Spajic to Kwon are simply political smears.