The founder of Terraform Labs, Do Kwon, has been arrested by Montenegrin police at an airport with falsified documents. This news comes after Kwon’s location had been a mystery for months, and he had been on an Interpol wanted list in connection with last year’s TerraUSD collapse. Kwon is also facing an investigation in South Korea and has already faced civil charges filed by the U.S. Securities and Exchange Commission (SEC).
Allegations of Market Manipulation & Fraud On Terraform Labs Founder
Federal prosecutors in New York have charged Kwon with fraud, conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation.
The complaint alleges that Kwon made a number of “untrue and misleading statements of material fact” over several years, citing T.V. appearances and tweets from accounts tied to Terraform Labs.
According to the filing, Kwon sought the assistance of a U.S. trading and investment firm to manipulate the market price of UST, which the firm reportedly provided. This allegation was also made by the SEC in its complaint.
According to Filip Adzic, the interior minister of Montenegro, Kwon was arrested with falsified documents at an airport earlier on Thursday. The Korean National Police Agency later confirmed his identity.
Kwon’s arrest represents a significant milestone in the ongoing investigation, as he has been the subject of multiple inquiries and was even the subject of an Interpol red notice.
The collapse of the TerraUSD (UST) stablecoin and its $40 billion ecosystem last year sent shockwaves through the crypto markets, and Kwon was implicated in the incident.
The news of Kwon’s arrest was announced on Twitter by Filip Adzic, the minister of interior of Montenegro. Adzic’s account is followed by the official account of the prime minister of Montenegro, Dritan Abazovic, who retweeted the announcement. However, the account Adzic is unverified, and official confirmation of Kwon’s identity is still awaited.
Kwon’s extradition is being demanded by South Korea, the USA, and Singapore, and the Department of Justice has confirmed its intention to seek his extradition to the U.S.
This arrest represents a significant step forward in the investigation into the collapse of terraUSD and its associated ecosystem. The impact of this development on the broader cryptocurrency market is yet to be determined, but it is expected to attract close scrutiny from investors and regulators.
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