Do Kwon, the founder of Terraform Labs, currently sought by South Korea and the US for a plan that led to a $40 billion loss for investors after the firm’s cryptocurrency nosedived in value last year, is now facing a four-month jail term in Montenegro. The conviction pertains to charges of falsifying official papers, following Kwon’s late March arrest at Podgorica Airport while he was attempting to fly to Dubai using counterfeit Costa Rican passports, as revealed by local newspaper Vijesti. Former finance officer of Terraform Labs, Han Chang-joon, also faces charges and the same sentence for this offense. The two were also discovered with forged Belgian passports and computers, which were sought by both US and South Korean authorities, in their baggage.
Kwon and his colleagues marketed TerraUSD and Luna as stablecoins tied to the US dollar, asserting that this linkage offered them enhanced stability. These coins, however, crashed in May 2022, wiping out numerous investors’ life savings. This led to several accusations of Kwon orchestrating a Ponzi scheme. A warrant for Kwon’s arrest and that of five other associates was issued by South Korea in September, though Kwon, his family, and some Terraform Labs finance staff had already relocated to Singapore, where the company was registered. Following this, Interpol added Kwon to their “red notice” list, urging global law enforcement to apprehend him, which Montenegrin authorities cited as another justification for Kwon’s arrest.
In February, the US Securities and Exchange Commission accused Kwon of not offering “full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD.” They also claimed that Kwon and his company committed fraud by making false and misleading assertions to gain trust before causing significant financial harm to investors. After his arrest, the US District Court in Manhattan made public an indictment against Kwon that included eight counts, such as securities fraud and conspiracy.
While Montenegro doesn’t currently hold extradition agreements with the US or South Korea, the possibility remains under consideration. Kwon’s four-month jail sentence follows shortly after Montenegrin authorities extended their detention period by six months, while they deliberate on how to respond to the extradition requests from the two countries.
Frequently Asked Questions (FAQs) about Do Kwon Cryptocurrency Scam
Who is the founder of Terraform Labs?
The founder of Terraform Labs is Do Kwon.
What charges have been levelled against Do Kwon?
Do Kwon has been found guilty on charges of forging official documents in Montenegro. He is also wanted by South Korea and the US for a scheme that lost investors $40 billion when the company’s cryptocurrency plummeted. The US Securities and Exchange Commission has also charged Kwon with failing to provide full, fair, and truthful disclosure as required for a host of crypto asset securities, and committing fraud by repeating false and misleading statements.
Where and why was Do Kwon arrested?
Do Kwon was arrested at Podgorica Airport in Montenegro while attempting to board a flight to Dubai with fake Costa Rican passports. He is also on Interpol’s “red notice” list at the request of Korean authorities.
What is the status of Do Kwon’s trial?
As of the date of the text, Do Kwon has been sentenced to a four-month jail term in Montenegro. The US District Court in Manhattan has also publicly released an indictment against Kwon including eight counts, such as securities fraud and conspiracy.
Is there a possibility of extradition for Do Kwon?
Although Montenegro doesn’t have extradition treaties with the US or South Korea, the idea of extradition is still under consideration. The authorities are determining how to proceed with the two nation’s extradition requests.
More about Do Kwon Cryptocurrency Scam
- Terraform Labs
- US Securities and Exchange Commission
- Interpol Red Notice
- Cryptocurrency Fraud
- Podgorica Airport
6 comments
This kinda stuff is bad for the whole crypto world. It’s not just about one company or one guy. It impacts the reputation of crypto and blockchain. Hope justice is served.
i dont get it why’d he think he could get away with it? forging passports & running from Interpol… sounds like a movie plot.
Forgin passports? Now that’s some next level fugitive stuff. Wonder what happens next, extradition or what?
Wow, just wow. Knew something fishy was going on with Terraform! 40 billion… that’s crazy. Feel sorry for the investors.
Ain’t no running from the law. He was gonna get caught sooner or later. Good to see justice being done.
This’s why I always say DYOR. Never trust these founders blindly. The whole crypto space is like wild west rn…