The New York Prosecutor's Office has filed criminal charges against Do Kwon, co-founder and CEO of Terraform Labs. Minister of Internal Affairs Filip Adzic tweeted that the former cryptocurrency tycoon was detained at the airport in Podgorica (Montenegro) with forged documents.
The case against him includes charges of conspiracy to defraud, commodity fraud, securities fraud, wire fraud and market manipulation. The US Department of Justice intends to request the extradition of Terra's creator to the US.
The statement states that Kwon spread false and deceptive information on television, as well as on social media sites associated with Terraform Labs. According to US authorities, Kwon collaborated with others to deceive Terraform Labs cryptocurrency buyers by claiming that the algorithm could guarantee rate stability, when in fact it had been artificially manipulated for their benefit.
Relevant law enforcement agencies said that Do Kwon had been in contact with a US trade and investment company for the purpose of manipulating the value of UST. It was found that it is a Jump Crypto company.
Until mid-September 2022, Do Kwon lived in Singapore. That was until South Korea charged him with violating the Capital Markets Act. As a result, Interpol issued a "red alert" for his detention. Despite this, he has pleaded not guilty and denied hiding from the law. In November, it became known that he had moved to Serbia.
The investigation into Kwon and Terraform Labs began in May 2022 after the system collapsed. The plaintiffs, who suffered huge losses from their investment in Terra, filed a $57 million lawsuit against Kwon in late October. All 359 investors claimed that Kwon and company executives had given them a false representation about the technical state of UST.