TerraUSD Founder Do Kwon Charged in US Following Arrest in Montenegro

TerraUSD Founder Do Kwon Charged in US Following Arrest in Montenegro

TerraUSD Founder Do Kwon Charged in US Following Arrest in Montenegro

Do Kwon, the cryptocurrency entrepreneur behind two digital currencies that lost an estimated $40 billion (nearly Rs. 3,28,500 crore) or more last year, has been accused of fraud by the US prosecutors.

An eight-count indictment against Kwon was released in US District Court in Manhattan, hours after his arrest was announced earlier Thursday in Montenegro.

Kwon’s attorneys in the United States did not immediately respond to after-hours requests for comment.

Thursday’s indictment charges Kwon, a South Korean national who co-founded Terraform Labs and developed the TerraUSD and Luna currencies, with two counts each of securities fraud, wire fraud, commodities fraud and conspiracy.

The criminal case follows related civil charges at the U.S. Securities and Exchange Commission against Kwon and Terraform last month.

Kwon had been a fugitive for several months and South Korean authorities issued an arrest warrant for him last September.

South Korean police said on Friday that the identity of the suspect arrested in Montenegro had been confirmed as Kwon after his fingerprints matched information held by the country’s National Police Agency (KNPA).

“This has been shared with the Seoul Southern District Prosecutor’s Office and Interpol in Montenegro,” a KNPA official said.

Prosecutors will work with other institutions to effect a speedy repatriation, a spokesman for the country’s prosecutor’s office said.

Montenegro’s Interior Ministry said police arrested a suspected Kwon and a second suspect, who were trying to board a flight to Dubai at Podgorica airport.

Police found fake passports from Costa Rica and Belgium during the meeting, the ministry said.

“The person is believed to be one of the most wanted fugitives, South Korean national Do Kwon, co-founder and CEO of Singapore-based Terraform Labs,” Interior Minister Filip Adzic wrote on Twitter. .

“The former king of cryptocurrency, who is responsible for losses of more than 40 billion dollars, was apprehended at Podgorica airport with false documents,” Adzic added.

TerraUSD was a so-called “stablecoin” designed to maintain a constant price of $1, while Luna’s value fluctuated.

But authorities said TerraUSD and Luna are paired, so a drop in one could bring down the other.

They also said that Kwon misrepresented the stability of TerraUSD, once among the top 10 cryptocurrencies by market value.

Both currencies crashed last May, with the price of TerraUSD falling to less than a penny.

In its civil case, the SEC accused Kwon and Terraform of “orchestrated a multi-billion dollar crypto asset securities fraud.”

“We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses to investors,” SEC Chairman Gary Gensler said in a statement at the time. .

© Thomson Reuters 2023

Affiliate links may be generated automatically – see our ethics statement for details.


Be the first to comment

Leave a Reply

Your email address will not be published.