The Justice Department charged South Korean crypto entrepreneur Do Kwon with fraud on Thursday as officials in Montenegro arrested the creator of the failed TerraUSD stablecoin, the Wall Street Journal reported. In an indictment unsealed in a New York federal court, Mr. Kwon was charged with eight criminal counts of fraud and is accused of conspiring with an unnamed U.S.-based investment firm to use trading strategies to alter the price of the stablecoin in May 2021. That month, TerraUSD fell beneath its $1 peg but recovered, a rebound that Kwon later cited as evidence of its stability. Kwon lied in television interviews and on social media about Terra’s blockchain technology and the effectiveness of an algorithm ensuring the stability of TerraUSD, federal prosecutors said. Earlier on Thursday, Montenegro’s interior minister said a person believed to be Kwon was arrested after months in hiding. Montenegro Interior Minister Filip Adzic said on Twitter that the suspect was detained in the airport of the country’s capital of Podgorica with false documents.
