(Repeats to reinstate story from March 23 deleted in error)
By Jonathan Stempel, Aleksandar Vasovic and Hyunsu Yim
NEW YORK/PODGORICA/SEOUL, March 23 (Reuters) - Do Kwon,
the cryptocurrency entrepreneur behind two digital currencies
that lost an estimated $40 billion or more last year, has been
charged with fraud by U.S. prosecutors.
An eight-count indictment against Kwon was made public in
the U.S. District Court in Manhattan, several hours after news
of his arrest earlier Thursday in Montenegro.
Lawyers for Kwon in the United States did not immediately
respond to requests for comment after business hours.
Thursday's indictment charges Kwon, a South Korean national
who co-founded Terraform Labs and developed the TerraUSD and
Luna currencies, with two counts each of securities fraud, wire
fraud, commodities fraud and conspiracy.
The criminal case follows related U.S. Securities and
Exchange Commission civil charges against Kwon and Terraform
last month.
Kwon had been a fugitive for several months, and South
Korean authorities issued an arrest warrant for him last
September.
South Korean police said 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
National Police Agency (KNPA).
"This has been shared with the Seoul Southern District
Prosecutors' Office and Interpol in Montenegro," one official at
the KNPA said.
Prosecutors will work with other institutions to carry out a
swift repatriation, a spokesperson for the country's prosecution
service said.
Montenegro's interior ministry said police detained a person
thought to be Kwon and a second suspect, who were trying to
board a flight to Dubai at Podgorica airport.
Police found forged passports of Costa Rica and Belgium
during the encounter, the ministry said.
"The person is suspected of being one of the most wanted
fugitives, South Korean national Do Kwon, a co-founder and CEO
of the Singapore-based Terraform Labs," Interior Minister Filip
Adzic wrote on Twitter.
"The former cryptocurrency king who is behind losses of over
$40 billion, has been apprehended at the Podgorica airport with
forged documents," Adzic added.
TerraUSD was a so-called "stablecoin" designed to maintain a
constant $1 price, while Luna's value fluctuated.
But authorities have said TerraUSD and Luna were paired,
such that a decline in one could take down the other.
They also said Kwon misrepresented the stability of
TerraUSD, once among the top 10 cryptocurrencies by market
value.
Both currencies crashed last May, with TerraUSD's price
sinking to less than one penny.
In its civil case, the SEC accused Kwon and Terraform of
"orchestrating a multi-billion dollar crypto asset securities
fraud.
"We also allege that they committed fraud by repeating false
and misleading statements to build trust before causing
devastating losses for investors," SEC Chair Gary Gensler said
in a statement at 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; Additional reporting by Jihoon Lee
in Seoul; Editing by Hugh Lawson, Emelia Sithole-Matarise and
Diane Craft)
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