Do Kwon, CEO of the blockchain project Terra, was arrested in Montenegro, and shortly after that, the U.S. Attorney’s Office filed fraud charges against him. Extradition is under consideration.
Do Kwon, CEO of Terraform Labs, was arrested by Montenegrin police. He was detained at the airport in Podgorica with falsified documents, as announced by the country’s Minister of Interior Filip Adzic.
According to the local publication Pobjeda, the Basic State Prosecution Office may bring criminal charges against the founder of Terra for using fake documents, the maximum penalty in this case is up to three years in prison. It’s worth noting that an arrest warrant for Do Kwon was issued by the South Korean prosecutor’s office back on September 14, 2022, a month after which his passport was officially revoked by the country’s Ministry of Foreign Affairs. He had also been wanted by Interpol since late September, and the U.S. Securities and Exchange Commission filed fraud charges against him in February of this year.
Hours after his arrest in Montenegro, fraud charges were filed against Do Kwon by the U.S. Attorney’s Office for the Southern District of New York. Specifically, he’s charged with eight counts, including commodities and securities fraud, wire fraud, and conspiracy to defraud and manipulate the market. The prosecutor’s office will work to seize movable and immovable property acquired as a result of the fraud, and the U.S. Department of Justice plans to seek the extradition of Terraform Labs’ founder to the United States.
The Terra blockchain project went bankrupt in May 2022, after the UST (now USTC) algorithmic stablecoin lost its peg to the dollar and LUNA (now LUNC) dropped by nearly 100%. Users’ total losses in the most active phase of the crisis were estimated to exceed $20 billion a week.
