Terra CEO Do Kwon Detained in Montenegro for Using Fake Documents, Charged Hours after Arrest

Do Kwon, CEO of Terraform Labs, was reportedly arrested in Montenegro before being charged with multiple counts of fraud by US prosecutors in New York.

The charges include commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation.

One of the charges is conspiracy to defraud, and prosecutors claim they have jurisdiction over Kwon because he made false and misleading statements during a TV interview that was transmitted to various locations, including the Southern District of New York, regarding the level of adoption of the Terra blockchain by users.

This news follows reports from the minister of interior of Montenegro that an individual suspected of being Kwon was detained at Podgorica airport with falsified documents while attempting to fly to Dubai. Kwon and his fellow business partner, Hon Chang Joon, were detained with Kwon allegedly using forged travel documents from Costa Rica.

On March 23, it was reported by Montenegro-based newspaper Pobjeda that the Basic State Prosecution Office may be pressing criminal charges against Do Kwon and Hon Chang Joon for allegedly using fake Costa Rican travel documents.

The luggage of Kwon and Joon was also searched, and three laptops, five mobile phones, and fake Belgium travel documents were found.

Kwon, who had already been issued an arrest warrant by South Korean prosecutors on September 14, had also been placed on Interpol's red notice list and had fraud charges filed against him by the United States Securities Exchange Commission on February 16.

The charges are related to his alleged involvement in the collapse of the Terra Luna Classic (LUNC) token and TerraClassicUSD stablecoin (USTC) in May 2021.

Kwon has reportedly been moving between Singapore, Dubai, and Serbia since the collapse.

His passport was officially canceled by the South Korean foreign ministry on October 20, after he failed to surrender his passport following an October 6 order, according to Cointelegraph.

If convicted, the charges against Kwon and Joon could carry a maximum imprisonment sentence of three years under Article 412 paragraph 2 of the Criminal Code of Montenegro.