TERRAAfter being apprehended in Montenegro, Terraform Labs founder and crypto-fugitive Do Kwon was charged with eight counts of fraud in New York.
Kwon is accused of two counts of conspiracy, securities fraud, wire fraud, and commodities fraud in the indictment, which was made public in the U.S. District Court in Manhattan on Thursday.
US prosecutors highlighted how Kwon misrepresented the degree of user adoption of the Terra blockchain in a TV appearance by making a number of false and deceptive claims.
The former crypto CEO also allegedly made a number of false claims regarding the TerraClassicUSD stablecoin’s ability to maintain its peg with the US dollar as well as Kwon’s alleged involvement in trading tactics intended to change the market price of assets.
The Securities and Exchange Commission accused Terraform Labs and Kwon of misleading US investors in the middle of February. Additionally, Terraform Labs and Kwon were charged with perpetrating a multibillion-dollar cryptocurrency fraud in the SEC’s complaint.
According to the commission, Terraform and Kwon sold “crypto asset securities” in the form of algorithmic stablecoin Terra USD (UST) and its sibling cryptocurrency LUNA in order to raise billions of dollars from investors between 2018 and May 2022.
In particular, it was alleged in the case that Terraform and Kwon had continuously used a defective model while deceiving investors regarding the stability of UST.
Furthermore, according to the agency, Kwon transferred more than 10,000 Bitcoin from the Luna Foundation Guard (LFG) reserves to a cold wallet and has been withdrawing money via a Swiss banking institution.
Months after the unheard-of collapse of the Cryptocurrency, a Seoul court issued an arrest order for Kwon in the middle of September.
Terraform Labs founder arrest
Do Kwon, the cryptocurrency founder behind two digital currencies that managed to lose an estimated $40 billion or more last year, was accused formally on Friday by Montenegrin police of faking official documents after being apprehended at the Podgorica airport.
Do Kwon, a citizen of South Korea, and another suspect were detained on Thursday at the airport in Podgorica as they attempted to catch a plane to Dubai.
In a statement, the police claimed that during the encounter, they had discovered counterfeit passports from Belgium and Costa Rica in their bags.
According to the report, the two suspects have also been accused of forging official documents in front of a court in Podgorica.
A global arrest warrant had been issued for the two, to assure their presence before the Southern District Court in Seoul on suspicion of committing various illegal crimes in the realm of economy.
One KNPA representative stated, “Information has been shared with the Seoul Southern District Prosecutors’ Office and Interpol in Montenegro.”
Do Kwon hideouts exposed
Kwon allegedly fled South Korea for Singapore around the time of the crash and then landed in Serbia via Dubai, where he was hiding, according to South Korean officials at the time.
In an effort to enlist assistance in the search for Kwon, a delegation of South Korean authorities even flew to Serbia in February.
Incidentally, Kwon’s passport was formally revoked by the South Korean foreign ministry late last year. Since then, he has been traveling using forged documents.
According to a local news source, Kwon will also face criminal charges from the Basic State Prosecution Service of Montenegro for using fraudulent travel documents.
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