Do Kwon, the man behind the LUNA disaster with more than 40 billion USD in damages, was charged by US prosecutors with fraud on March 23.
US prosecutors filed an eight-count indictment against Do Kwon in Manhattan District Court, hours after news of his arrest in Montenegro.
Kwon’s attorney in the US did not immediately respond to requests for comment.
The indictment charges Kwon – a Korean citizen and co-founder of Terraform Labs, which develops two series of cryptocurrencies TerraUSD and LUNA – with two counts of securities fraud, wire fraud, commodity fraud and conspiracy.
Kwon was indicted following relevant civil charges filed by the US Securities and Exchange Commission against the man and Terraform last month.
South Korean authorities issued an arrest warrant for Do Kwon in September 2022, but the man was on the run for several months.
Montenegro’s Interior Ministry said on March 23 that local police arrested a person believed to be Kwon and a second suspect, as they were both trying to board a flight to Dubai at Podgorica airport.
Police found fake Costa Rican and Belgian passports during the arrest.
“One of the world’s most wanted criminals has been arrested in Podgorica. Montenegro police have arrested a person, suspected to be Do Kwon, CEO and co-founder of Terraform Labs. We are still waiting for a confirmation. verify the identity of this person,” Montenegro Interior Minister Filip Adzic wrote on Twitter.
Previously, in a civil lawsuit, the US Securities and Exchange Commission accused Kwon and Terraform of “ordinating a multi-billion dollar crypto asset securities scam.”
“We allege they committed fraud by repeating false and misleading statements in order to build trust and then inflicting heavy losses on investors,” SEC Chairman Gary Gensler said. said in a statement.
The empire run by Do Kwon collapsed in May 2022 because it could not control the stablecoin UST and token LUNA, causing billions of dollars in losses for investors around the world. It contributed to the collapse of the Three Arrows Capital fund, causing asset liquidation.
This is also the cause of large losses, and loss of liquidity in Voyager Digital, Celsius Network, causing the entire cryptocurrency market to wobble.
This event contributed to the erosion of investor confidence, indirectly bringing down many cryptocurrency exchanges and other decentralized financial platforms.