Terraform Labs CEO Kwon Do-hyung, who was arrested in Montenegro, has been charged with fraud and other charges by prosecutors in New York, Bloomberg reported on the 23rd (local time).

Prosecutors in New York charged Kwon with eight counts, including securities fraud, financial fraud using internet banking and market manipulation, Bloomberg reported.

Montenegro's Interior Ministry said the suspected Kwon Do-hyung was arrested in Montenegro's capital, Podgoriza, and that he and another close aide were caught trying to board a flight to Dubai using forged Costa Rican and Belgian passports.

However, it has not been confirmed whether the arrest was at the request of the US authorities.

Last month, the U.S. Securities and Exchange Commission also sued Do-Hyung Kwon and his virtual currency Terraform USD (UST) and Luna issuer Terraform Labs for fraud.

The Seoul Southern District Prosecutor's Financial Crimes Joint Unit also determined that Terra and Luna could be viewed as securities in September last year, obtained an arrest warrant for Kwon on suspicion of violating the Capital Market Act, and pursued him, and requested Interpol to cooperate and issued a red list.

Kwon Do-hyung was accused of providing false information, such as continuing to issue Terra and Luna without notifying investors, even though they knew that they were likely to crash together.

UST, a virtual currency designed to be linked to fiat currencies such as the dollar, was designed to maintain a fixed exchange ratio of 8 to 9 with the dollar through exchanges with its sister coin, Luna.

However, in May last year, the related system became inoperable, causing a large-scale sell-off between UST and Luna, which hit the global cryptocurrency market.

As a result, Terraform Labs collapsed, leading to a series of bankruptcies of cryptocurrency hedge fund Srierous Capital (1AC), coin brokerage and lender Voyager Digital and cryptocurrency giant FTX.