U.S. to Prosecute Do Kwon for Crypto Fraud Following Extradition Approval
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Do Kwon, the co-founder of Terraform Labs, is facing fraud charges in the U.S. for his involvement in a scheme that caused huge losses for U.S. investors. Kwon will be extradited from Montenegro, where he has been in jail for four months for using a fake passport.
JUST IN: 🇺🇸 Terra Founder Do Kwon to be extradited to the United States.
— Watcher.Guru (@WatcherGuru) February 21, 2024
SEC Accuses Do Kwon and TerraForm Labs of Fraud and Price Manipulation
Terraform Labs is the company behind TerraUSD, an algorithmic stablecoin that claims to maintain a stable value by adjusting its supply. However, the Securities and Exchange Commission (SEC) alleges that Kwon and his company deceived investors by selling unregistered securities that were linked to Terra and other crypto assets.
According to the SEC, Kwon and his company raised billions of dollars from investors without disclosing the risks and limitations of their project. The SEC also accuses them of manipulating the price of Terra and other tokens to benefit themselves and harm investors.
Apart from that, the Terra-Suite tokens are fabled to be responsible for the crypto market meltdown of 2022.
Kwon was arrested in Montenegro in March 2023 when he tried to leave the country with a counterfeit passport. He initially agreed to be extradited to South Korea, where he is also wanted for fraud. However, the High Court in Montenegro decided to send him to the U.S. instead, rejecting South Korea’s request.
Kwon’s lawyer had asked for a delay in the extradition, citing difficulties in preparing his defense. The jury trial on the fraud charges was postponed from January to late March. Kwon faces up to 20 years in prison if convicted.
The case of Terraform Labs is one of the largest and most complex crypto fraud cases in history. It shows the need for investors to be careful and informed when dealing with crypto assets.
