Do Kwon faces fraud charges in New York, LUNA price recovers from 9% crash

Terraform Labs co-founder Do Kwon is set to face more charges in the United States in addition to the ones that already exist against him. The arrest of the former Chief Executive Officer (CEO) of Terra will finally allow the fraud proceedings to begin.

Do Kwon faces the music in New York

According to an indictment on March 23, Do Kwon was charged with eight counts of fraud. A federal grand jury accused Kwon of securities fraud, commodities fraud, wire fraud, as well as conspiracy, along with other charges. The indictment noted that Kwon allegedly deceived investors about the Terra blockchain and also falsified its adoption figures in television interviews and on social media.

Another charge accused Do Kwon of allegedly engaging in market manipulation with a United States-based trading firm in regard to the stablecoin TerraUSD (UST).

Earlier in the day, Do Kwon was arrested by the Montenegrin police at the Podogirca airport along with Terra’s CFO, Hon Chang Joon. The two were detained for attempting to travel to Dubai using falsified documents and were also held for using falsified Belgian travel papers, according to the Interior Minister.

The charges from the New York prosecutors have been added to the charges from the Securities and Exchange Commission. Last month, the regulatory body charged Do Kwon with orchestrating a multi-billion dollar fraud where the founder misled and deceived customers with its marketing.

LUNA price rises back up

LUNA price was quick to react to the news of Do Kwon’s arrest as the altcoin dipped by more than 9.79% within hours, falling to a two-month low. However, the cryptocurrency recovered soon after to climb back up, trading at $1.348 at the time of writing. 

LUNA price is currently stuck under the downtrend since January this year, failing to recover in the first two weeks of March when most of the market did. The altcoin not only has to breach this downtrend line but also flip the barrier at $1.475 into support to initiate a recovery rally toward $1.754.

LUNA/USD 1-day chart

On the flip side, the cryptocurrency faces a potential drop in value that would push LUNA price to $1.229. Testing this level would bring the altcoin to the December 2022 lows at $XXX, and falling through the same would result in LUNA declining to a ten-month low.