Do Kwon Faces Fraud Charges from US Prosecutors in New York

Just hours after the news broke about the possible arrest of Terraform Labs Do Kwon, the US prosecutors charged the man with eight criminal counts.

Following his alleged arrest in Montenegro, Terraform Labs CEO Do Kwon is now facing fraud charges from United States prosecutors based in New York.

Do Kwon, the 31-year-old “crypto king,” has been formally charged with eight separate counts, as detailed in a legal filing signed by US Attorney Damian Williams. The charges include commodities fraud, securities fraud, wire fraud, and conspiracy to engage in fraud and market manipulation.

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The conspiracy to engage in fraud charge alleges that US prosecutors have jurisdiction over Kwon due to a series of false and misleading statements he made during a televised interview. The interview, which aired in various locations, including the Southern District of New York, focused on the adoption of the Terra blockchain.

Subsequent other charges relate to a string of purportedly false statements about the TerraClassicUSD (USTC) stablecoin and its capacity to preserve its peg to the US dollar. Kwon is also accused of participating in trading strategies designed to manipulate the market price of USTC.

These charges come in the wake of a March 23rd report by Montenegro’s Interior Minister, Filip Adzic, which stated that an individual believed to be the former “cryptocurrency king” was arrested at Podgorica airport while carrying “falsified documents.”

Do Kwon, the suspected individual, was detained alongside his business partner, Hon Chang Joon, as they attempted to board a flight to Dubai.

The Montenegro Interior Ministry also claimed that Kwon had been in possession of fake Costa Rican travel documents.

On March 23rd, Montenegrin newspaper Pobjeda reported that the Basic State Prosecution Office could soon bring criminal charges against Kwon and Joon for using fake Costa Rican travel documents. The criminal offense falls under Article 412, paragraph 2 of the Criminal Code of Montenegro, which carries a maximum sentence of three years in prison.

Pobjeda also reported that, during a search of their luggage, authorities discovered fake Belgian travel documents, three laptops, and five mobile phones, which were subsequently seized from arrested individuals.

Gile K. - Crypto Analyst

by Gile K. – Crypto Analyst, BitDegree

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