Terraform Labs CEO Do Kwon has been charged with fraud by U.S. prosecutors in New York, hours after his reported arrest in Montenegro.
In a court document signed by U.S. Attorney Damian Williams, the 31-year-old entrepreneur was charged with eight separate counts, including commodities fraud, securities fraud, wire fraud and conspiracy to defraud and participate in market manipulation. On the first charge, conspiracy to defraud, U.S. Attorneys claimed jurisdiction over Kwon for making a series of false and misleading statements in a television interview that was broadcast to the Southern District of New York, among other places, Regarding the level of adoption of the Terra blockchain by users.
The remaining four charges relate to a series of allegedly misleading statements about the effectiveness of the TerraClassicUSD stablecoin (USTC) in maintaining its peg to the U.S. dollar, as well as Kwon’s alleged involvement in trading strategies designed to alter market prices. University of Science and Technology of China. The filing comes as Montenegro’s interior minister, Filip Adzic, reported on March 23 that a suspected former “cryptocurrency king” was arrested at Podgorica airport for “falsified documents.” detention.
The suspect, believed to be Kwon, was detained at Podgorica airport with business partner Hon Chang Joon as they tried to fly to Dubai, Adzic said. In a follow-up tweet, Montenegro's Interior Ministry reported that Kwon used fake travel documents from Costa Rica. The Basic State Prosecutor's Office may soon bring criminal charges against Kwon and Joon for using forged travel documents from Costa Rica, which they say was first discovered by Interpol, Montenegro-based newspaper Pobjeda reported on March 23.
It is understood that this criminal offense falls under Article 412, paragraph 2, of the Criminal Code of Montenegro, and is punishable by up to three years in prison. The luggage search also found forged Belgian travel documents as well as three laptops and five mobile phones, which were taken from them, Pobjeda reported. South Korean prosecutors issued an arrest warrant on Sept. 14 for Kwon, who faces a string of fraud charges and violations of capital market laws in his hometown. Additionally, Interpol issued a Red Notice for his arrest on Sept. 26, and the SEC filed its own fraud charges on Feb. 16.
The charges against him relate to his alleged role in the $40 billion debacle of the Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin (USTC) last May. Quan has reportedly been moving between Singapore, Dubai and Serbia since its collapse. South Korea's foreign ministry formally canceled Kwon's passport on Oct. 20 for failing to surrender it as ordered on Oct. 6.
