U.S. prosecutors in the Southern District of New York have charged Do Kwon, the founder of the collapsed Terra ecosystem, with eight counts of fraud.
The move came right after Kwon was arrested at the Podgorica Airport in Montenegro with Han Chang Joon, the chief financial officer of Terraform Labs, while trying to fly to Dubai with falsified travel documents.
- Federal prosecutors said they would seek Kwon's extradition to New York.
- If he is transported to New York, the Terra founder will be prosecuted by the same office overseeing a criminal case against the bankrupt crypto exchange FTX's co-founder, Sam Bankman-Fried (SBF).
- The police from Kwon's native South Korea, which issued an arrest warrant for Do Kwon last year, also asked Montenegro for the Terra founder's extradition.
- Similarly, Montenegrin police charged Kwon with forgery.
- In February, the U.S. Securities and Exchange Commission (SEC) sued Kwon with allegations of the offer and sale of unregistered securities.
- The International Criminal Police Organization (Interpol), which confirmed Kwon's identity through a fingerprint match after the arrest, had been seeking Kwon for nearly six months with a red notice issued in September 2022.
- The 31-year-old founder was thought to be hiding in Serbia, the neighboring country of Montenegro, since December last year.
- Kwon has been subject to lots of lawsuits and investigations in many other countries, including South Korea and the U.S., with allegations such as tax fraud, deceiving investors, racket collecting, and building a Ponzi scheme.
- The collapse started after the multibillion-dollar Terra ecosystem's native token Luna's price plummeted nearly to zero in May 2022 and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- Luna's collapse caused over $60B to be wiped off the crypto market.
