Do Kwon faces financial fraud charges after TerraUSD meltdown.
Details of the arrest
Montenegro’s Interior Minister Sergei Securovich announced on Friday, March 25, that a man named Do Quon had been arrested. Kwon founded Terra, a cryptocurrency platform based on blockchain technology. He was arrested at the request of the U.S government seeking extradition.
The US has charged Kwon with fraud and money laundering, accusing him of facilitating the laundering of more than $25 million in cryptocurrency. The money was said to have been used to finance Silk Road, a dark web marketplace that sells illegal drugs and other illegal goods.
Kwon, a South Korean citizen, was reportedly arrested in Montenegro while trying to flee to Serbia. According to Minister Sekulović, Kwon lived in Montenegro for several months before his arrest. The minister did not provide additional details regarding Kwon’s arrest or the charges against him.
Terra on the Spotlight for Stablecoin Failure
Founded by Kwon in 2018, the Terra platform has been hailed as a promising new blockchain project aiming to create a stablecoin pegged to the South Korean Won. The platform has raised over $200 million from investors including Binance, the world’s largest cryptocurrency exchange.
News of Kwon’s arrest comes at a time of heightened regulatory scrutiny of the cryptocurrency industry. The US government cracks down on cryptocurrency-related crime, especially money laundering and fraud. Earlier this month, the U.S. Department of Justice seized $2 billion worth of cryptocurrency allegedly linked to the Silk Road.
The arrest of a high-profile cryptocurrency figure like Kwon is likely to send shockwaves through the industry, especially South Korea, where Terra is based. It remains to be seen if it will affect the development of the Terra platform.
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