Imagine the Alps falling directly into the Mediterranean. Montenegro. Photo by lasserbua via License: Creative Commons

Do Kwon of Terra (LUNA) hid in Montenegro from the reach of international justice. Now it turns out that he had an investor at the head of the country – the fascinating Prime Minister Milojko Spajic.

That was a twist in the Terra story that no one would have expected. Really not.

A brief background to refresh your memory: Terra was a smart contract blockchain, similar to Ethereum, but closely linked to an algorithmic stablecoin, the UST, the Terra dollar. After the UST collapsed, it took Terra with it – and triggered the major crypto crisis at the end of 2022, which escalated with the bankruptcy of FTX. As a result, Terra founder Do Kwon was charged in South Korea and the USA. He fled, was arrested in Montenegro, was released a few months later and reached a settlement with the SEC a week ago.

In keeping with the location, it now emerges that Montenegrin Prime Minister Milojko Spajic was an early investor in Terraform Labs, the company behind Terra. Spajic, who took office in October 2023, had already invested $75,000 in Terraform Labs in April 2018, a few days before Terra registered in Singapore, and received 750,000 LUNA tokens in return.

Spajic paid ten cents per LUNA. That was a sensationally good deal, because before the big collapse, LUNA tokens were never so cheap. By mid-2019, the value was already well over 50 cents, in 2021 it rose to more than 10 dollars, from October LUNA could not be bought for less than 40 dollars, and in spring 2022 they were even worth more than 100 dollars.

Price of LUNA. Imagine you enter to the left of the screenshot…

The crypto market is wild, but the chance to multiply your capital a thousandfold in four years is still rare. If Spajic had sold at a good time, he would have pocketed around $75 million. He would definitely be the most successful speculator among all European – heck, global! – heads of government.

But who is Spajic – and why did he invest in Terra so early?

Milojko Spajic: The figure in the centre

Milojko Spajic has been the Prime Minister of Montenegro since October 2023. He is a relatively impressive person, and one of the kind of leaders who could be a tremendous asset to Europe.

Spajic was born in September 1987 and is just 36 years old. He studied “Ecometrics” in Japan, which means the quantitative analysis of economic, ecological and social systems, and completed a master’s degree at a business school in Paris. In addition to Serbo-Croatian, he speaks English, Japanese, Chinese, Russian and French. After graduating, he worked on Wall Street in Paris and Tokyo, including for Goldman Sachs and the venture capital firm Das Capital SG – in Singapore.

In 2020, at just 33 years old, he became finance minister in Montenegro, where he implemented controversial economic reforms. After Prime Minister Zdravko Krivokapic dismissed his deputy Dritan Abazovic in the wake of the parliamentary crisis, he appointed Spajic as his successor. However, Spajic founded the pro-European party “Europe now!” with Economy Minister Jakov Milatovic, of which he was chairman. In October 2023, he finally became prime minister in this role.

Spajic is seeking EU and NATO membership for Montenegro, and wants to strengthen relations with Serbia and Montenegro’s independence. He seems to be well on his way to achieving this. According to the Konrad Adenauer Foundation, Montenegro is the most advanced candidate for EU accession, which is also due to the reforms that were initiated under Spajic in recent months. “No country in the region is currently making more determined progress in creating the necessary conditions,” said Federal Chancellor Olaf Scholz at a meeting with Spajic at the end of April.

Given his age, his economic education, his great ambitions and his interest in crypto, one could consider Spajic to be the Nayib Bukele of Europe, the politician who is turning a poor, small country on the periphery of Europe into a financial and tourism hub. But while Bukele, the president of El Salvador, is investing in a solid cryptocurrency with Bitcoin, Spajic’s investment in Terra turned out to be a dud that is currently threatening to come back to haunt him.

Spajic concealed the investment

Spajic came into contact with Terra through Das Capital SG. He worked there as a partner from 2017 to 20202. According to his own statements, Spajic invested in Terra on behalf of this fund. He did not mention a personal investment in Terra, and in his asset and income declaration he did not state that he owned LUNA tokens.

The documents that have now come to light in the course of the Terraform Labs trial show that Spajic concealed significant information about his wealth from the public – and, to put it more bureaucratically, from the anti-corruption agency to which politicians in Montenegro are accountable. For a politician in the highest position in a country, this must be a scandal.

Spajic is now accused of being involved in a conflict of interest. The question of why Do Kwon was arrested and detained in Montenegro of all places is likely to further exacerbate the scandal. The first calls for his resignation are already coming from the ranks of the opposition. It would be a shame if the young, pro-European, progressive, technology-friendly government were to fall because of this scandal.

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