Do Kwon Now Faces Criminal Fraud Charges From U.S. Prosecutors

Federal prosecutors filed criminal fraud charges against the Terraform Labs founder, who already faced civil charges in the U.S. and was arrested earlier Thursday.

AccessTimeIconMar 23, 2023 at 9:41 p.m. UTC
Updated Mar 24, 2023 at 3:08 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

Federal prosecutors in New York charged Terraform Labs founder Do Kwon with fraud hours after he was arrested by police in Montenegro.

Kwon, whose location had been a mystery for months, also faces an investigation in South Korea and has been on an Interpol wanted list in connection with last year's terraUSD (UST) collapse. Kwon already faced civil charges filed by the U.S. Securities and Exchange Commission, which alleged in February that he misled investors.

According to the complaint, Kwon is being charged with conspiracy to defraud, commodities fraud, securities fraud, wire fraud and conspiracy to engage in market manipulation. A spokesperson confirmed to CoinDesk that the Department of Justice would seek his extradition to the U.S.

The filing alleged that Kwon made a number of "untrue and misleading statements of material fact" over the course of several years, citing TV appearances and tweets from accounts tied to Terraform Labs (TFL).

"Kwon agreed with others to defraud purchasers of cryptocurrencies issued by TFL, by deceiving those purchasers about the effectiveness of the algorithmic mechanism that purportedly ensured the stability of UST's price through false statements and market manipulation," the filing alleged under one of the charges.

The filing said that Kwon "contacted representatives of a United States trading and investment firm" for help in "altering the market price of UST," which the company provided. The Securities and Exchange Commission made a similar allegation in its own complaint, and CoinDesk later reported this firm appeared to be Jump Crypto.

Filip Adzic, the interior minister of Montenegro, announced Kwon had been arrested by police at an airport with falsified documents earlier on Thursday. The Korean National Police Agency later confirmed his identity.

UPDATE (March 23, 2023, 21:55 UTC): Adds detail throughout.

UPDATE (March 23, 22:25 UTC): Adds filing.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.