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Crypto founder Do Kwon indicted in US after Montenegro arrest


The co-founder of Singapore-based Terraform Labs faces eight charges, including securities fraud and bank fraud.

Do Kwon, the South Korean entrepreneur behind the collapse of the $40 billion terraUSD and Luna cryptocurrencies, has been charged with fraud in the United States following his arrest in Montenegro.

U.S. prosecutors announced eight charges against Kwon on Thursday, including securities fraud, wire fraud, commodities fraud and conspiracy.

Kwon, 31, was arrested in Montenegro earlier on Thursday along with another South Korean citizen, the European country’s interior ministry said.

“The person is suspected 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 behind losses of more than $40 billion has been apprehended at Podgorica airport with forged documents,” Adzic added.

Kwon and the other man were stopped trying to board a flight to Dubai using “falsified travel documents from Costa Rica, which were also identified by Interpol checks,” the ministry said in a statement.

South Korean authorities said last year that the crypto founder had traveled to an unknown country via Dubai after leaving Singapore.

The criminal charges follow a related civil suit against Kwon and his Singapore-based company Terraform Labs, which was announced last month by the US Securities and Exchange Commission.

A lawyer for Kwon did not immediately respond to a request for comment, the Financial Times and Wall Street Journal reported.

Holders of TerraUSD and Luna, its floating sister currency, lost about $40 billion after the so-called “stablecoin” plummeted past the $1 peg in May.

TerraUSD was marketed as pegged to the US dollar to avoid wild price swings, but authorities have claimed that the values ​​of the token and Luna were linked.

South Korean authorities have opened multiple criminal investigations into the crash, with some investors losing their life savings.

Kwon’s arrest is the latest example of a growing crackdown on cryptocurrencies following multiple industry scandals, including the collapse of FTX and the arrest of founder Sam Bankman-Fried.

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

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