According to the Financial Times, Do Kwon, founder of Terraform Labs ( LUNA ), was indicted by US authorities hours after his arrest in Montenegro on March 23.
As the Financial Times article notes, Kwon has been accused of defrauding cryptocurrency customers and faces eight criminal charges, including securities, commodities, and wire fraud.
U.S. prosecutors released a 12-page indictment on March 23, in which Kwon was accused of:
“Deceive those people on every aspect of the Terra blockchain, including its technology and the level of its user adoption.”
Prosecutors also cited Kwon's remarks in an October 2019 interview and "misleading" social media posts he made the following year as grounds for charges, allegations that Kwon's lawyers did not respond to.
Arrested in Montenegro
On March 23, Montenegrin officials announced that they had arrested a person suspected to be Do Kwon in the country's capital, Podgorica. Hours later, Montenegrin Vice President Filip Adjic confirmed via his Twitter account that the detainee was indeed Kwon himself.
Adjic's translation says:
“Montenegro police have detained a South Korean citizen who is suspected to be one of the wanted criminals, Do Kwon, co-founder and CEO of Singapore-based Terraform Labs.”
However, even before Adzic’s confirmation, the crypto community was convinced that the arrested person was Kwon. In December 2022, Kwon was located in Serbia, which borders Montenegro. South Korean prosecutors also confirmed Kwon’s arrest before Adzic, saying that the age, nationality, and name matched Kwon’s.
background
In May 2022, TerraUSD ( USDC ) lost its peg and caused the Terra ecosystem to collapse, leading to the coldest winter in cryptocurrency history.
Soon after the investigation began, authorities accused Kwon of withdrawing $80 million per month from the LUNA project, totaling $2.7 billion. Kwon denied all charges and filed a lawyer in August 2022.
Kwon disappeared after that. In September 2022, South Korean authorities asked Kwon to return and cooperate with the investigation. Kwon responded by denying he was at large, but also did not try to contact prosecutors. In the same month, South Korea turned to Interpol for help, and Interpol issued a red notice for Kwon, requiring all prosecutors around the world to track him down and arrest him.
In December 2022, Kwon was in Serbia. At that time, the authorities found out that Kwon had fled to Serbia from Dubai. However, the pursuit did not end with an arrest. In February, the South Korean authorities admitted that they went to Serbia for Kwon.
