The Terraform Labs CEO is currently facing fraud charges in South Korea, before the Securities and Exchange Commission, and before federal prosecutors in New York.
Terraform Labs CEO Do Kwon has been charged with fraud by U.S. prosecutors in New York, reportedly just hours after he was arrested in Montenegro.
In a court document signed by U.S. Attorney Damian Williams, the 31-year-old entrepreneur was charged with eight different counts, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and participate in Market manipulation.
Under the first charge, conspiracy to commit wire fraud, U.S. prosecutors claim jurisdiction over Kwon because he made a series of false and misleading statements in a television interview that was transmitted to the Southern District of New York, among other places, about the level of user adoption of the Terra blockchain.
The remaining four charges relate to a series of allegedly misleading statements about the effectiveness of the TerraClassicUSD stablecoin ( USTC ) in maintaining its peg to the U.S. dollar, as well as Kwon’s alleged involvement in trading strategies designed to change market prices. University of Science and Technology of China.
The filing comes as Montenegrin Interior Minister Filip Adzic reported on March 23 that an alleged former “crypto king” was arrested at Podgorica airport for “forged documents.” detention.
The suspect, believed to be Kwon, was detained at Podgorica airport with colleague Hon Chang Joon as they tried to fly to Dubai, Adzic said.
In a follow-up tweet, Montenegro's interior ministry reported that Kwon used forged travel documents from Costa Rica.
Criminal charges in Montenegro
The Montenegro-based newspaper Pobjeda reported on March 23 that the Basic State Prosecution may soon file criminal charges against Kwon and Joon for using forged travel documents from Costa Rica, which they said was first discovered by Interpol.
It is understood that the criminal offence falls under Article 412, Paragraph 2 of the Criminal Code of Montenegro and is punishable by up to three years in prison.
A bag search also revealed forged Belgian travel documents as well as three laptops and five mobile phones, which were taken from them, Pobjeda reported.
South Korean prosecutors issued an arrest warrant on September 14 for Kwon, who faces a series of fraud charges and violations of capital markets laws in his homeland. In addition, Interpol issued a red notice for his arrest on September 26, and the U.S. Securities and Exchange Commission filed its own fraud charges on February 16.
The charges against him relate to his alleged role in the collapse of the $40 billion Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin (USTC) last May.
Since the collapse, Quan has reportedly been moving between Singapore, Dubai and Serbia.
South Korea's foreign ministry officially canceled Kwon's passport on October 20 after he failed to surrender it as ordered on October 6.