Do Kwon, the famous South Korean crypto entrepreneur was charged with fraud by the Justice Department on Thursday after he was arrested by the officials in Montenegro.
Do Kwon is known for being the brain behind two cryptocurrencies that lost an estimated $40 billion or more last year. Do Kwon is the creator of the failed crypto coin known as TerraUSD stablecoin.
The news about the charge was made public in a United States District Court in Manhattan, where it was made clear that Do Kwon was charged with eight criminal frauds along with the charges of conspiring with an unnamed U.S based investment firm in order to use trading strategies to alter the price of a stablecoin in March 2021.
Do Kwon, the South Koren crypto entrepreneur who co-founded the Terraform labs and also developed the two currencies Luna and TerraUSD is currently charged with two counts of cases like conspiracy, wire fraud, commodities fraud, and securities fraud.
While the lawyers of Do Kwon in the United States were approached for their statement, they did not immediately respond to the comments or give an official statement regarding the situation.
In March 2021, the month that DoKwon was accused of conspiring with a U.S based firm, the price of his coinTerra TerraUSD fell beneath the price of $1, against what was assured by the officials behind the coin.
Even though the price of the coin fell beyond the said limit, TerraUSD was able to make a recovery and bounce back. Kwon later cited this as evidence of the stability of the coin.
The South Korean authorities issued an arrest warrant for Do Kwon in September last year and Kwon had been a fugitive ever since the release of the warrant.
Earlier on Thursday, Montenegro Interior Minister Filip Azidac shared a piece of news on his Twitter account stating that a man who is suspected to be Do Kwon had been detained in the airport at Podgorica, which is the capital city of Montenegro.
The news also stated that the man who was detained was found to be possessing false documents. The South Koren authorities responded to the news and with the help of the Montenegro authorities, they carried out a fingerprint examination and the result proved that the man was Do Kwon himself.
The news about the detainment of Do Kwon in Montenegro also stated that Do Kwon was accompanied by another South Korean man at the airport. Do Kwon and his companion were caught by the officials while they were trying to board a flight to Dubai.
The officials of Montenegro also made it clear that both of them were held for the charges of possessing forged documents and trying to leave the country using them. The ministry of Montenegro also added that there were official records of the two entering the county.
As per the latest reports, the man along with Do Kwon was identified to be Han Chang-Joon by South Korean officials. Mr. Han used to work as the former chief executive for Chai Corp.
It is the company that was behind the development of a South Korean payment app and was also known to have a previous partner shop with Do Kwon’s Terraform Labs. The Chai Corp. has not responded to the news with any statement from their side.
TerraUSD sought to maintain a price of $1 but lost the value of the coin beyond it a few times. While the coin was able to make a recovery the first time, the coin failed to do so the second its value fell below $1.
The effect of the price drop was massive and resulted in a total loss of around $40 billion or more for the company and its investors. The crash affected the investors very badly and some reported that they lost their entire life savings because of it.
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Taking the recent events in the field of cryptocurrency, authorities not only in the United States but all over the world are skeptical about the operations and stability of crypto assets and are more watchful of the industries to avoid another fatal crash that could affect people.
The crash of FTX in November has made the authorities more vigilant about the situation. Many crypto firms were also affected by the crash of FTX.
The same is the case with Do Kwon and his currency TerraUSD and Luna. Almost a year back, Do Kwon was one of the biggest crypto entrepreneurs in the world and he was backed by some of the biggest investors and other firms in the market.
There was huge support for the Stanford graduate and investors were flocking to TerraUSD and Luna. But the unexpected crash of the currencies completely destroyed the reputation of Do Kwon and his company.
The crash of the company gave rise to different investigations and lawsuits all over the world. The arrest of Do Kwon which was reported just days back is a result of months-long investigations and manhunting. The search for Do Kwon spanned two continents – Asia and Europe.
Even while he was being searched by the police, Kwon made the occasional appearance on social media platforms in order to promote new cryptocurrency projects. He also used those times to defend against the fraud charges that were raised against him.
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