Terraform Labs co-founder Do Kwon will face securities fraud charges in the US

Terraforms Labs CEO Do Kwon spent the last day of 2024. in extradition to the US, Reuters reports. Kwon faces charges in the US for “orchestrating a multi-billion dollar crypto asset securities fraud involving algorithmic stablecoin and other crypto asset securities.” The Terraforms co-founder has been detained in Montenegro since March 2023 when he tried to board a flight with a fake passport – six months later Interpol issued a “red warrant”. for his arrest.

South Korea-based Terraforms Labs wiped $40 billion from the crypto market when its stablecoins TerraUSD and Luna proved less stable and collapsed in May 2022. Kwon had already fled South Korea a month earlier.

The US announced its charges in February 2023, p SEC Chairman Gary Gensler said“We allege that Terraform and Do Kwon have not provided the public with full, fair and true disclosure as required for multiple crypto asset securities, most notably Luna and TerraUSD. We also allege that they committed fraud by repeating false and misleading claims to build confidence before causing devastating losses to investors.” South Korea issued similar accusations.

Montenegro has no extradition treaties with the US or South Korea. The request has been pending in court for the past year and a half, with Montenegrin Justice Minister Bojan Bojovic ordering Kwon’s extradition last week. Terraform Labs submitted an application Chapter 11 Bankruptcy Protection in the US last January.