<\/p>\n
Already notorious as an agent of market chaos, the crypto industry has also unleashed political havoc, leading to a critical general election in Montenegro, a troubled Balkan nation struggling to shake off the grip of organized crime and Russian influence.<\/p>\n
Just days before the June 11 vote, Montenegro’s political landscape was thrown into disarray by the intervention of Do Kwon, the fugitive head of a failed crypto business whose collapse last year contributed to to a $2 trillion industry-wide drop.<\/p>\n
In a handwritten letter sent to the authorities from the Montenegrin prison where he has been held since March, Mr. Kwon claimed he had “a very successful investment relationship” with the leader of the Europe Now Movement, the election leader, and that “friends in the crypto industry” had provided campaign funding in exchange for promises of ” crypto friendly policies”.<\/p>\n
Europe Now was expected to win a decisive popular mandate in the elections for a new Parliament. His campaign combined populist promises to raise salaries and pensions with promises to put the country on a clear path to joining the European Union by cleaning up the crime and corruption that flourished under Montenegro’s former leader Milo Djukanovic.<\/p>\n
The party still won more votes but fell well short of expectations, finishing just ahead of a rival group that supports Russia and may now derail efforts to form a stable pro-Western coalition government. Only 56 percent of the electorate voted, a record low turnout.<\/p>\n
Mr. Kwon’s intervention “destroyed us,” said Europe Now leader Milojko Spajic, a target of the disgraced crypto entrepreneur’s letter, which was reviewed by The New York Times and the existence of the which was leaked to the local media before the vote.<\/p>\n
In an interview, Mr. Spajic denounced the accusations of Mr. Kwon as “super fake” and part of a “dirty political game” to damage his party’s chances. The lawyers of Mr. Kwon have not disputed the authenticity of the letter.<\/p>\n
As the founder of Terraform Labs, Mr. Stanford-educated Kwon was once hailed as a pioneer in cryptography, responsible for the design of a popular digital currency, Luna, he said would change the world and whose fans he proudly referred to as “Lunatics.” .\u201d<\/p>\n
The spectacular collapse in May 2022 of moon<\/a> and a second cryptocurrency designed by Mr. Kwon, Earth USD,<\/a> it transformed him from a hero of innovation to a fugitive wanted by both the United States and South Korea on fraud charges.<\/p>\n After that, he disappeared, his whereabouts a mystery until Montenegrin authorities announced in March that he had been detained while trying to board a private plane bound for Dubai in Podgorica, the capital, on a passport – fake rich<\/p>\n He had insisted it was genuine, but on Monday a court in Podgorica found Mr Kwon and a South Korean crypto-business partner guilty of using forged travel documents and sentenced them to four months in prison.<\/p>\n It is still unclear what Mr. Kwon in Montenegro before his arrest and when he arrived. His activities since his arrest are murkier.<\/p>\n Despite stripping himself of his electronic devices, the jailed Mr. Kwon appears to have somehow moved $29 million from a crypto wallet linked to him, South Korean prosecutors said, confirming a Bloomberg News report .<\/p>\n Dritan Abazovic, acting Prime Minister of Montenegro and political rival of Mr. Spajic, said there was no evidence that Mr. Kwon entered the country or checked into hotels, so authorities want to establish whether he had local collaborators.<\/p>\n “I’m not accusing Spajic of anything,” said Mr. Abazovic in an interview, “but we need to see what was happening in the crypto community here and whether it was involved in money laundering and campaign financing.”<\/p>\n Long a center for cigarette smuggling and cocaine trafficking during more than three decades of Mr. Djukanovic, Montenegro has promoted itself in recent years as a hub for the crypto industry.<\/p>\n In 2022, Mr. Spajic, who was the finance minister at the time, predicted that the industry could account for almost a third of Montenegro’s economic output within three years.<\/p>\n For Mr Spajic and other blockchain believers, cryptography was the next big thing, according to Zeljko Ivanovic, the head of independent media group Vijesti.<\/p>\n “It was seen as an easy way out – a new secret recipe to replace the smuggling that had been Djukanovic’s recipe for decades,” Ivanovic said. “But the miracle cure turned out to be a disaster.”<\/p>\n Eager to attract talent, Montenegro last year granted citizenship<\/a> to Vitalik Buterin, a Russian-Canadian and founder of Ethereum, the most popular cryptocurrency platform.<\/p>\n Mr Buterin said he “never met or spoke to Do Kwon, even through third parties”, and “never gave money to Europe Now”.<\/p>\n