NEW YORK/PODGORICA/SEOUL: Do Kwon, the cryptocurrency entrepreneur behind two digital currencies that lost an estimated $40 billion or more last year, has been charged with fraud by US prosecutors.
An eight-count indictment against Kwon was unsealed in US District Court in Manhattan, several hours after news broke of his arrest early Thursday in Montenegro.
Kwon's attorneys in the United States did not immediately respond to requests for comment after business hours.
Thursday's indictment charges Kwon, a South Korean national who co-founded Terraform Labs and developed the TerraUSD and Luna coins, with two counts each of securities fraud, wire fraud, commodity fraud and conspiracy.
The criminal case follows related civil charges from the US Securities and Exchange Commission against Kwon and Terraform last month.
Kwon had been on the run for several months and South Korean authorities issued an arrest warrant for him last September.
South Korean police said Friday that the identity of the suspect arrested in Montenegro had been confirmed as Kwon after his fingerprints matched information held by the country's National Police Agency (KNPA).
"This has been shared with the Seoul Southern District Prosecutor's Office and Interpol in Montenegro," a KNPA official said.
Prosecutors will work with other institutions to carry out a speedy repatriation, a spokesman for the country's prosecutor's office said.
Montenegro's interior ministry said police detained a person believed to be Kwon and a second suspect, who were trying to board a flight to Dubai at Podgorica airport.
Police found forged passports from Costa Rica and Belgium during the encounter, the ministry said.
"The person is suspected to be one of the most wanted fugitives, South Korean national Do Kwon, co-founder and CEO of Singapore-based Terraform Labs," Home Secretary Filip Adzic wrote on Twitter.
โThe former king of cryptocurrency behind losses of over $40 billion has been detained at Podgorica airport with forged documents,โ Adzic added.
TerraUSD was one of the so-called "stablecoins" designed to maintain a constant price of $1 while the value of Luna fluctuated.
But authorities have said that TerraUSD and Luna were paired, so a crash in one could wipe out the other.
They also said that Kwon misrepresented the stability of TerraUSD, once in the top 10 cryptocurrencies by market value.
Both coins crashed last May, with the price of TerraUSD plunging to less than a penny.
In their civil case, the SEC accused Kwon and Terraform of "orchestrating a multi-billion dollar crypto asset securities fraud."
"We also allege that they committed fraud by repeating false and misleading statements to build confidence before causing devastating losses to investors," SEC Chairman Gary Gensler said in a statement at the time.
(Reporting by Aleksandar Vasovic in Belgrade, Stevo Vasiljevic in Podgorica, Hyunsu Yim and Heekyong Yang in Seoul, and Jonathan Stempel in New York; Additional reporting by Jihoon Lee in Seoul; Editing by Hugh Lawson, Emelia Sithole-Matarise and Diane Craft)
