A few hours after being detained, Do Kwon was charged with fraud by US prosecutors.
The CEO of Terraform Laboratories is currently being investigated for fraud by the Securities and Exchange Commission, and federal prosecutors in New York, and South Korea.
Do Kwon, the CEO of Terraform Labs, has reportedly been arrested in Montenegro, but only hours later, US prosecutors in New York have charged him with fraud.
The 31-year-old entrepreneur has been charged with eight different crimes, including commodities fraud, securities fraud, wire fraud, and conspiracy to commit fraud and market manipulation, according to a court document filed by United States Attorney Damian Williams.
Kwon is accused of violating the first charge of conspiracy to defraud because he allegedly made a number of false and misleading statements about the level of user adoption of the Terra blockchain during a TV interview that was broadcast, among other places, to the Southern District of New York.
The remaining four allegations involve a variety of allegedly fraudulent statements regarding the TerraClassicUSD stablecoin’s (USTC) capacity to keep its peg to the US dollar as well as Kwon’s alleged participation in trading techniques intended to change the USTC market price.
Translation from Montenegro Minister of Interior Filip Adzic – “ONE OF THE WORLD'S MOST WANTED FUGITIVES WAS ARRESTED IN PODGORICA
Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon…” https://t.co/sCJ0FFrlEk
— Simon Dixon (@SimonDixonTwitt) March 23, 2023
The application was made at the same time as Filip Adzic, Montenegro’s interior minister, reported on March 23 that a person thought to be the former “cryptocurrency king” was arrested at the Podgorica airport with “falsified documents.”
According to Adzic, the suspect, who is suspected to be Kwon, was detained at the airport in Podgorica along with business partner Hon Chang Joon as they intended to board a flight to Dubai.
The Montenegrin Interior Ministry later tweeted that Kwon had used forged Costa Rican travel documents.
Accusations of crime in Montenegro
The Basic State Prosecution Service may soon file criminal charges against Kwon and Joon for using fake travel passports from Costa Rica, which they claim were initially discovered by Interpol, according to a March 23 report in the Montenegrin newspaper Pobjeda.
The offence is thought to come under Montenegro’s Criminal Code, Article 412, Paragraph 2, which provides a three-year maximum term for imprisonment.
Three laptops and five mobile phones that were taken from them were also found during a search of their luggage, according to Pobjeda.
On September 14, South Korean prosecutors issued an arrest warrant for Kwon, who is accused of many fraud offences and violations of capital markets legislation in his native state. Moreover, the United States Securities Exchange Commission filed its own fraud allegations on February 16 and Interpol issued a red notice asking for his arrest on September 26.
Charges have been brought against him for his alleged role in the $40 billion Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin’s collapse in May.
JUST IN: $LUNA falls 8.2% to $1.31 following reports of Do Kwon’s alleged arrest in Montenegro.
— CoinGecko (@coingecko) March 23, 2023
Kwon apparently has been hopping between Singapore, Dubai, and Serbia since the collapse. Kwon’s passport was formally revoked by the South Korean foreign ministry on October 20 after he fail to follow an order to surrender it on October 6.