US prosecutors have reportedly accused the notorious Co-Founder of Terraform Labs – Do Kwon – of orchestrating a cryptocurrency scam that drained at least $40 billion from investors.
The authorities of Montenegro 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.
The US Pressing Charges
According to a Bloomberg coverage, US prosecutors named Kwon as the main culprit behind the collapse of LUNA/UST in May last year that led to multi-billion 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 charged him with securities fraud, commodities fraud, and conspiracy. The accusations come one month after the US SEC’s plea that Terraform Labs and Kwon organized a massive scam by offering and selling unregistered securities through the use of digital currencies.
The US Department of Justice also joined the club, launching an investigation against the project and its former employees to determine the main factors behind the catastrophe.
Kwon was detained earlier this week in the Balkan country of Montenegro after allegedly swapping locations to stay away from the radar of multiple authorities and even Interpol. His last possible destination was Serbia which is the eastern neighbor of Montenegro.
It remains unclear whether his arrest was at the request of US law enforcement agents. Nonetheless, federal prosecutors stated they would seek his extradition to New York. In case he gets deported to America, he will face prosecution by the same office that oversees the case against Sam Bankman-Fried – the infamous former CEO of FTX who could have had a role in the exchange’s demise.
Extradition fights could sometimes be postponed for years. However, Michael Zweiback – an American lawyer specializing in such cases – believes Kwon will eventually land in either South Korea or the USA since he has no apparent ties in Montenegro.
“And the first one that picks him up wins,” the attorney said.
Kwon’s Broken Promise
Kwon’s arrest came four months after he vowed to organize a conference and lift the curtain on his mysterious location. He even invited police officers to attend the event.
Unwilling to cooperate with the relevant authorities and regulators, the South Korean supposedly escaped his homeland and frequently changed his destination. Some of his possible hiding spots over the past months include Dubai, Singapore, Russia, Mauritius, the Seychelles, Serbia, and more.
Apart from his alleged involvement in the Terra crash, the South Korean authorities also investigated him for taxation evasion. They maintained he gifted tokens to family members as a way of tax avoidance.
Featured Image Courtesy of Mothership
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.