US prosecutors have reportedly charged notorious Terraform Labs co-founder Do Kwon with orchestrating a cryptocurrency scam that drained at least $40 billion from investors.
Montenegrin authorities arrested the 31-year-old developer earlier this week after he was on the run for several months, hiding in numerous countries and falsifying his identity.
United States files charges
According to a Bloomberg coverageUS prosecutors named Kwon as the main culprit behind the collapse of LUNA/UST in May last year that caused multi-billion dollar losses for investors. According to the US indictment, Terraform Labs operated as a cryptocurrency fraud, for which its co-founder should receive appropriate punishment.
More specifically, a grand jury in Manhattan indicted him for securities fraud, commodity fraud, and conspiracy. The allegations come a month after the US SEC. petition that Terraform Labs and Kwon organized a massive scam by offering and selling unregistered securities through the use of digital currencies.
The United States Department of Justice also joined the club, launch an investigation against the project and its former employees to determine the main factors behind the catastrophe.
kwon was arrested earlier this week in the Balkan country of Montenegro after allegedly changing locations to stay off the radar of multiple authorities and even Interpol. His last possible destination it was Serbia, which is Montenegro’s eastern neighbor.
It is not clear if his arrest was at the request of US law enforcement officials. However, federal prosecutors stated that they would seek his extradition to New York. Should he be deported to the United States, he will face prosecution from the same office overseeing the case against Sam Bankman-Fried, the infamous former FTX CEO who may have played a role in the exchange’s demise.
Extradition fights could sometimes be put off for years. However, Michael Zweiback, an American lawyer who specializes in such cases, believes that Kwon will eventually land in South Korea or the US, as he apparently has no ties to Montenegro.
“And the first one to pick it up wins,” said the lawyer.
Kwon’s Broken Promise
Kwon’s arrest came four months after he vowed to host a conference and lift the curtain on his mysterious location. He even invited the police officers to attend the event.
Unwilling to cooperate with relevant authorities and regulators, the South Korean allegedly fled his homeland and frequently changed destinations. Some of his possible hideouts in recent months include Dubai, Singapore, Russia, Mauritius, Seychelles, Serbia, and more.
In addition to their alleged involvement in the Terra accident, the South Korean authorities also investigated him for tax evasion. They maintained that he gave away chips to family members as a form of tax evasion.
Featured image courtesy of Mothership
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