Terraform Labs founder Do Kwon has been indicted in the US on fraud charges hours after his arrest in Montenegro.
A grand jury in New York federal court charged Kwon with securities fraud, wire fraud and commodities fraud, the indictment shows.
Kwon also has pending federal cases in the Southern District of New York with the SEC. The securities regulator charged Kwon with an alleged unregistered security offering last month. Kwon was first served with a subpoena from the SEC in November 2021, Kwon and Terraform then countersued the agency challenging the subpoenas, citing alleged violations to due process law.
Montenegrin authorities may hand Kwon over to the US, based on prior agreements.
Montenegro has in the past “provided significant assistance” in extraditions to the US, the Department of Justice said in November 2022. Montenegro will only extradite on bilateral agreement and will transfer the person who has been granted extradition within 30 days, according to the Council of Europe.
Kwon is still wanted by government officials in South Korea, who issued a warrant for his arrest in October 2022.
Terraform Labs’ stablecoin, TerraUSD (UST), rocked crypto markets with its sudden collapse last year. The fall of UST, and its sister coin, LUNA, led to billions of dollars in losses for investors.
The US Department of Justice is reportedly investigating UST’s failure, alleging that Kwon and his company misled investors about the stablecoin’s risks.
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Source: https://blockworks.co/news/do-kwon-indicted-for-fraud