• US prosecutors have accused Terraform Labs’ Co-Founder Do Kwon of running a cryptocurrency scam that cost investors up to $40 billion.
• A grand jury in Manhattan has charged him with securities fraud, commodities fraud, and conspiracy.
• The US SEC also claimed that Terraform Labs and Kwon organized an unregistered securities sale through digital currencies, resulting in the collapse of LUNA/UST.
US Prosecutors Accuse Do Kwon of Crypto Fraud
American prosecutors have accused Do Kwon, the Co-Founder of Terraform Labs, of running a massive cryptocurrency scam that allegedly drained at least $40 billion from investors. A grand jury in Manhattan has charged him with securities fraud, commodities fraud, and conspiracy.
US SEC’s Plea Against Terraform Labs
In addition to the accusations by US prosecutors, the US Securities and Exchange Commission (SEC) also claimed that Terraform Labs and Kwon offered and sold unregistered securities via digital currencies which ultimately led to the collapse of LUNA/UST last May. This plea was followed by a Department of Justice investigation against Terraform Labs’ former employees to determine what caused this catastrophe.
Kwon Arrested by Montenegrin Authorities
The 31-year-old developer had been on the run for several months prior to his arrest earlier this week in Montenegro after falsifying his identity multiple times while attempting to evade authorities across numerous countries.
Implications for Investors
As a result of these events, many investors have reportedly suffered substantial losses due to Kwon’s actions. It remains unclear how they will be compensated or if any form of legal recourse is available for them at this time.
Potential Penalties for Kwon
Given the magnitude of these allegations against him, it is likely that Do Kwon will face severe penalties if found guilty by US courts or other legal systems around the world where he may be subject to extradition requests from American authorities.