Terraform Labs founder and crypto fugitive Do Kwon has been charged with eight counts of fraud in New York following his arrest in Montenegro.
The indictment, which was made public in US District Court in Manhattan on Thursday, charges Kwon with two counts of securities fraud, wire fraud, commodity fraud and conspiracy, according to one. reports by Reuters.
US prosecutors detailed that Kwon made a series of false and misleading statements during a TV interview regarding the extent to which the Terra blockchain had been adopted by users.
The disgraced crypto boss also made a series of allegedly misleading statements regarding the effectiveness of the TerraClassicUSD stablecoin to maintain its peg with the US dollar, as well as trading strategies designed to alter the market price of USTC. Quan’s alleged involvement.
The new indictment comes as the Securities and Exchange Commission Was accused Terraform Labs and Quon defrauded US investors in mid-February.
The complaint filed by the SEC accuses Terraform Labs and Kwon of perpetrating a multibillion-dollar cryptocurrency fraud.
The commission said that Terraform and Kwon raised billions of dollars from investors between 2018 and May 2022, by selling synthetic assets or “MSets”, the algorithmic stable currency Terra USD (UST), and its sister “crypto asset securities”. Cryptocurrency Luna.
Specifically, the lawsuit claimed that Terraform and Kwon misled investors about the stability of UST while it was using a flawed model.
The agency also claimed that Kwon moved more than 10,000 bitcoins from Luna Foundation Guard (LFG) reserves to a cold wallet — and has been cashing out through a Swiss financial institution.
Do Kwon’s arrest confirmed in Montenegro
Filip Adzic, Minister of the Interior of Montenegro announced It was reported via Twitter on Thursday that a man suspected of being Do Kwon was arrested at Podgorica airport.
A translation of Adzic’s tweet read, “Montenegrin police have detained a man suspected to be one of the most wanted fugitives, South Korean national Do Kwon, co-founder and CEO of Singapore-based Terraform Labs.”
On Friday, South Korean police said the suspect arrested in Montenegro had been identified as Kwan after his fingerprints matched information held by the country’s National Police Agency (KNPA).
“It has been shared with the Seoul Southern District Prosecutor’s Office and Interpol in Montenegro,” said a KNPA official.
Do Kwon is the co-founder and CEO of Singapore-based Terraform Labs, the company behind the crashed stablecoin TerraUSD and the cryptocurrency Luna.
TerraUSD used a mix of algorithms and merchant incentives tied to a sister token, Luna, to maintain its $1 peg.
However, the stablecoin Lost Its dollar peg in May last year after a wave of selloff in the crypto market.
While Terraform Labs managed to partially repair the peg by buying $2B of UST, the ongoing selloff drained those funds, hyperinflated UST’s sister token Luna, and drove down the price of both Luna and UST.
US prosecutors estimate that at least $40 billion of investors were lost in the crash of Terra Ecosystem.
hunting for do kwon do
In mid-September, months after the cryptocurrency’s unprecedented crash, a Seoul court issued an arrest warrant for Kwon.
At that time, South Korean officials Claimed That Kwon was hiding in Serbia, where he had arrived via Dubai after leaving South Korea for Singapore at the time of the accident.
Back in February, a group of South Korean officials also traveled went to Serbia to help in the search for Kwon.
Notably, the South Korean Foreign Ministry officially revoked Kwon’s passport late last year.
Since then he was using fake travel documents to move around. The native State Prosecution Office of Montenegro also plans to bring criminal charges against Quan for using forged travel documents. reports by a local outlet.