Do Kwon, the CEO of Terraform Labs, has purportedly been detained in Montenegro, but only hours later, US authorities in New York have charged him with fraud.
The 31-year-old businessman has been accused 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 count of conspiracy to defraud because he allegedly made a number of false and deceptive claims 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 concern a number of allegedly false claims regarding the TerraClassicUSD stablecoin's (USTC) ability to maintain its peg to the US dollar as well as Kwon's alleged participation in trading techniques intended to change the USTC market price.
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 thought to be Kwon, was stopped at the airport in Podgorica together with business partner Hon Chang Joon as they attempted to board a flight to Dubai.
The Montenegrin Interior Ministry later tweeted that Kwon had used counterfeit Costa Rican travel documents.
The Basic State Prosecution Office may soon file criminal charges against Kwon and Joon for using fake travel passports from Costa Rica, which they claim were initially uncovered by Interpol, according to a March 23 story in the Montenegrin newspaper Pobjeda.
The crime 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 discovered 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. Additionally, 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 part in the $40 billion Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin's demise in May.
Kwon is said to have travelled between Singapore, Dubai, and Serbia after the collapse.
After Kwon disobeyed an order to relinquish his passport on October 6, the South Korean foreign ministry formally revoked his passport on October 20.
Editor- Sarah Fathima Ahmed
March 2023, CryptoniteUae