Do Kwon arrested in Montenegro, faces fraud charges from US & South Korea
The co-founder and CEO of Terraform Labs, Do Kwon has been arrested in Montenegro and has been charged with fraud by United States prosecutors in New York.
The 31 year old South Korean entrepreneur is charged with eight separate counts including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation, according to a court filing signed by US Attorney Damian Williams.
Under the first charge of conspiracy to defraud, the U.S. prosecutors have claimed that Do Kwon have made a series of misleading statements during a TV interview that was transmitted to the Southern District of New York, regarding the extent to which the Terra had been adopted by users and the market.
Remaining charges are related to a series of purportedly misleading statements on utility and effectiveness of the new TerraClassicUSD stablecoin (USTC) to keep its peg with the U.S. dollar, as well as his alleged involvement in trading strategies that were designed to alter the market price of USTC stablecoin.
The arrest announcement comes as the minister of interior of Montenegro, Filip Adzic shared a tweet on March 23 that an individual suspected of being the former “cryptocurrency king” was detained at the Podgorica airport with “falsified documents."
“The suspect, believed to be Kwon, was detained in Podgorica Airport with fellow business partner Hon Chang Joon while trying to fly to Dubai,” Adzic stated. The Interior Ministry reported that Kwon used forged travel documents from Costa Rica.
Do Kwon was arrested with numerous forged documents. These included passports from Costa Rica and Belgium as well as a Hawaiian driver's license. pic.twitter.com/KSDLIGwDh4— Coin Bureau (@coinbureau) March 24, 2023
According to the local newspaper Pobjeda, Montenegro’s Basic State Prosecution Office may soon press criminal charges against both Kwon and Joon for using forged travel documents from Costa Rica, which they say was first discovered by Interpol. The alleged crime charge is understood to fall under Article 412 paragraph 2 of the Criminal Code of Montenegro, which carries a maximum imprisonment sentence of three years.
Back in September, 2022, South Korean prosecutors issued an arrest warrant against Do Kwon with him facing a series of fraud charges and breaches of capital markets law in his home state. Also, Interpol on Sept. 26 issued a red notice listing for his arrest, and the United States Securities Exchange Commission filed fraud charges of its own on Feb. 16.
The charges laid against him are in relation to his alleged role in the collapse of the $40 billion Terra Luna last May.