Do Kwon charged in the US following confirmed arrest in Montenegro Do Kwon charged in the US following confirmed arrest in Montenegro
The U.S. prosecutors accused Kwon of defrauding crypto customers and submitted him to eight criminal counts.
2 min read
Updated: Jul. 22, 2023 at 10:34 am UTC
FAQX™ We mining it / CC BY 3.0 / Wikimedia. Remixed by CryptoSlate
Terraform Labs (LUNA) founder Do Kwon was charged by the U.S. authorities hours after he was arrested in Montenegro on Mar. 23, according to a Financial Times report.
Kwon is accused of defrauding crypto customers and is facing eight criminal counts — which include securities, commodities, and wire fraud, as the Financial Times article noted.
The U.S. prosecutors published a 12-page indictment on Mar.23 which stated that Kwon was accused of:
“deceiving those individuals about aspects of the Terra blockchain, including its technology and the extent to which it had been adopted by users.”
The prosecutors also cited Kwon’s words from an interview he gave in October 2019, and his social media posts the following year that were “misleading,” and therefore, subject to the charges. Kwon’s lawyer did not respond to the accusations.
Arrest in Montenegro
On Mar. 23, Montenegro officials announced they arrested an individual suspected to be Do Kwon in the country’s capital Podgorica. Hours later, Montenegro’s Vice President Filip Adzic confirmed that the detained individual was indeed Kwon himself via his Twitter account.
Adzic’s translated text stated:
“Montenegrian police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder, and CEO of Singapore-based Terraform Labs.”
However, even before Adzic’s confirmation, the crypto community was confident that the arrested individual was Kwon. In December 2022, Kwon was located in Serbia, which shares a border with Montenegro. Korean prosecutors also confirmed Kwon’s arrest before Adzic, saying that the age, nationality, and name matched Kwon’s.
Background
In May 2022, TerraUSD (USDC) lost its peg and caused the Terra ecosystem’s collapse, leading to the emergence of the coldest crypto winter in history.
Soon after the investigation started, the authorities accused Kwon of withdrawing $80 million per month from the LUNA project — which added up to $2.7 billion. Kwon denied all the allegations and lawyered up in August 2022.
Kwon went missing after that. In September 2022, South Korean authorities requested Kwon’s return and cooperation with the investigations. Kwon responded by denying being on the run but also didn’t make any attempts to contact the prosecutors. Within the same month, South Korea asked for Interpol’s help, which issued a red notice for Do Kwon, requesting all prosecutors worldwide to locate and arrest him.
In December 2022, Kwon was located in Serbia. At the time, the authorities were able to detect that Kwon had fled to Serbia from Dubai. However, the chase didn’t end in an arrest. In February, South Korean authorities admitted that they traveled to Serbia for Kwon.
Mentioned in this article
Author 
Zeynep Geylan
Zeynep is an academic who turned to crypto in 2018. Originating in social sciences, she is especially interested in the social impact of blockchain and cryptocurrencies and strongly believes in their transmuting power.
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In this article
Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic.
TerraClassicUSD
$0.02113
TerraUSD (UST) is a decentralized and algorithmic stablecoin on the Terra blockchain.
Terraform Labs
Terraform Labs is a startup that created Terra, a blockchain protocol and payment platform used for algorithmic stablecoins.
Do Kwon began his professional journey as an engineer, contributing to tech giants Apple and Microsoft.