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By Jonathan Stempel, Aleksandar Vasovic and Hyunsu Yim
NEW YORK/PODGORICA/SEOUL (Reuters) -Enact Kwon, the cryptocurrency entrepreneur behind two digital currencies that misplaced an estimated $40 billion or more remaining 365 days, has been charged with fraud by U.S. prosecutors.
An eight-depend indictment against Kwon changed into made public in the U.S. District Court in Manhattan, several hours after news of his arrest earlier Thursday in Montenegro.
Attorneys for Kwon in the United States did no longer straight answer to requests for observation after business hours.
Thursday’s indictment charges Kwon, a South Korean nationwide who co-based Terraform Labs and developed the TerraUSD and Luna currencies, with two counts every of securities fraud, wire fraud, commodities fraud and conspiracy.
The criminal case follows linked U.S. Securities and Alternate Commission civil charges against Kwon and Terraform remaining month.
Kwon had been a fugitive for several months, and South Korean authorities issued an arrest warrant for him remaining September.
South Korean police acknowledged on Friday that the identity of the suspect arrested in Montenegro had been confirmed as Kwon after his fingerprints matched the information held by the country’s Nationwide Police Company (KNPA).
“This has been shared with the Seoul Southern District Prosecutors’ Dwelling of business and Interpol in Montenegro,” one official on the KNPA acknowledged.
Prosecutors will work with other institutions to raise out a swift repatriation, a spokesperson for the country’s prosecution service acknowledged.
Montenegro’s interior ministry acknowledged police detained a individual regarded as Kwon and a 2d suspect, who had been trying to board a flight to Dubai at Podgorica airport.
Police discovered cast passports of Costa Rica and Belgium during the stumble upon, the ministry acknowledged.
“The individual is suspected of being seemingly the most distinguished wanted fugitives, South Korean nationwide Enact Kwon, a co-founder and CEO of the Singapore-essentially based entirely Terraform Labs,” Interior Minister Filip Adzic wrote on Twitter.
“The worn cryptocurrency king who is behind losses of over $40 billion, has been apprehended on the Podgorica airport with cast documents,” Adzic added.
TerraUSD changed into a so-known as “stablecoin” designed to maintain a continuing $1 designate, whereas Luna’s rate fluctuated.
But authorities occupy acknowledged TerraUSD and Luna had been paired, such that a decline in one could well perhaps steal down the replacement.
They moreover acknowledged Kwon misrepresented the stability of TerraUSD, as soon as among the high 10 cryptocurrencies by market rate.
Both currencies crashed remaining Might perhaps also just, with TerraUSD’s designate sinking to lower than one penny.
In its civil case, the SEC accused Kwon and Terraform of “orchestrating a multi-billion dollar crypto asset securities fraud.
“We moreover instruct that they committed fraud by repeating counterfeit and misleading statements to gain belief sooner than causing devastating losses for investors,” SEC Chair Gary Gensler acknowledged in a statement on the time.
(Reporting by Aleksandar Vasovic in Belgrade, Stevo Vasiljevic in Podgorica, Hyunsu Yim and Heekyong Yang in Seoul, and Jonathan Stempel in New York; Extra reporting by Jihoon Lee in Seoul; Editing by Hugh Lawson, Emelia Sithole-Matarise and Diane Craft)
