"South Korean prosecutors will take steps to repatriate Kwon Do-hyung. We are working on it," Kim Hee-kyung, a spokeswoman for the South Seoul prosecutors' office, told AFP, citing her full name.

Mr. Kwon is the founder of Terraform Labs, the parent company of the "stable cryptocurrency" Terra that collapsed in May 2022. He is accused of fraud in this crash that caused investors to lose about $ 40 billion (37 billion euros).

The 31-year-old was arrested in Montenegro on Thursday along with his chief financial officer, Hon Chang Joon, according to Montenegrin Interior Minister Filip Adzic, adding that they had been apprehended at Podgorica airport under a South Korean warrant.

Shortly thereafter, a U.S. federal jury convicted Do Kwon on eight counts, including stock market fraud and online fraud.

According to the US Securities and Exchange Commission (SEC), the thirty-year-old is accused of having "orchestrated a fraud in crypto assets of several billion dollars".

In South Korea, Mr. Kwon is wanted for violations of financial market rules. He is suspected of having fled the country for Singapore at the time of the crash of May 2022.

In September, South Korean prosecutors asked Interpol to issue a red notice against him in the organization's 195 member countries and cancelled his passport.

Singapore police said at the time that Kwon was not in the city-state.

On Thursday, Montenegrin authorities said he had used "forged Costa Rican documents" during a pre-flight check that was supposed to take him to Dubai.

South Korea's National Police Agency told AFP it would work with Montenegrin prosecutors to arrange for Do Kwon's extradition.

South Korea is, like Montenegro, a member of the European Convention on Extradition, a multilateral agreement that facilitates extraditions between signatory countries, the Justice Ministry said in a statement.

It will "follow the extradition procedure in accordance with laws and international agreements".

Unstable "stablecoin"

Cryptocurrencies have come under increasing scrutiny since a series of crashes, controversies and the bankruptcy of FTX, one of their most important exchanges.

Many investors lost all their savings when the cryptocurrencies Terra and Luna, founded by Mr. Kwon, collapsed. The South Korean authorities then opened several criminal investigations.

"It is true that Kwon did too much harm to too many people, with something that carried a lot of unexplained risks," Cho Dong-keun, professor of economics emeritus at Seoul's Myongji University, told AFP.

In principle, a so-called stable cryptocurrency, or "stablecoin", guarantees more stability to investors in this highly volatile universe.

Its price can be backed by that of a traditional currency or tangible assets, but this was not the case of Terra which was linked to another crypto-asset developed by the Luna Foundation Guard of which Mr. Kwon is also a founder.

The prices of the stablecoin Terra and its sister token Luna quickly fell to zero after the tumble of mid-May 2022.

According to Bloomberg News, citing the SEC, Kwon and Terraform Labs also extracted more than 10,000 Bitcoins from their bankrupt project and converted some of them into cash via a Swiss bank.

"In the end, Kwon did not run his business in accordance with laws and principles. He exploited it for his own personal benefit," Kim Dae-jong, a professor of business administration at Sejong University in Seoul, told AFP.

"Kwon must definitely be held accountable for his actions."

© 2023 AFP