The co-founder and former CEO of a cryptocurrency company has been extradited to the US to be confronted with fraud.
South Korean National do Hyeong Kwon, 33, appeared on Thursday in a court in Manhattan after he was extradited from Montenegro on Tuesday.
Between 2018 and 2022 he is accused of cheating investors in Terraform Cryptocurrencies, resulting in losing more than $ 40 billion.
According to the Ministry of Justice (DOJ), Kwon Willens and Kwindly made false statements about TerraForm products, creating the illusion of a fully functioning and stable decentralized financial system.
This, in turn, has blown up the value of Terraform Cryptocurrencies, which Kwon is said to have sold to investors in exchange for billions of dollars in other assets.
Read more about crypto-fraud: SEC charges people with a crypto fraud schedule of $ 42 million.
Kwon is accused of making various wrong representation, about:
- The effectiveness of the ‘terra protocol’, of which he reportedly said he has maintained a pin between the company’s stablecoin (UST) and the US dollar
- The Luna Foundation Guard, of which Kwon reportedly said he was managed by an independent administrative body, and charged with the use of billions of dollars in financial reserves to defend UST’s PEG
- The success of an investment platform called “Mirror Protocol” that worked on the blockchain of Terraform
- The relationship between Korean payment processing Chai and the Terra Blockchain. Kwon reportedly claimed that Chai Terra used to process billions of dollars in transactions, while that did not
- A billion stablecoins (called “Genesis”) programmed in the Terra Blockchain in his creation. These were intended to be kept in reserve, but Kwon would have used at least $ 145 million of them to finance fake -chai blockchain transactions
UST’s Dollar PEG started to break down in May 2021, but Kwon was apparently able to hide weaknesses in the Terra protocol. However, when the same thing happened a year later, he could not repeat the trick and crashed the value of UST and another Terraform -Vuuruta, Luna, the Doj said.
Kwon is confronted with multiple accusations of raw material fraud, securities fraud, wire fraud and money laundering, which bear a combined maximum prison sentence of 130 years.