Cryptocurrency founder Do Kwon faces charges in the US after being arrested in Montenegro.

The co-founder of Singapore-based Terraform Labs, Do Kwon, who is the South Korean entrepreneur behind the $40 billion collapse of cryptocurrencies terraUSD and Luna, has been charged with fraud in the United States following his arrest in Montenegro.

U.S. prosecutors announced eight charges against Kwon on Thursday, including securities fraud, wire fraud, commodities fraud and conspiracy.

Kwon, 31, was arrested in Montenegro earlier this Thursday along with another South Korean national, the European country's interior ministry said. "So a police pursuit check was needed as a seedling," the ministry wrote on its Twitter page''Interior Minister Filip Adzic. "The former cryptocurrency kingpin behind over $40 billion in losses is documented in Podgorica with falsified documents," Adzic added.

Kwon and another man were stopped while trying to board a flight to Dubai using "fake travel documents from Costa Rica, which were also identified through Interpol controls," the ministry said in a statement.

South Korean authorities said last year that the cryptocurrency founder left Singapore and flew to an unknown country via Dubai.

A lawyer for Kwon has not responded to a request for comment at this time, the Financial Times and Wall Street Journal reported.

Owners of TerraUSD and Luna, its "floating" sister currency, lost about $40 billion after the so-called "stablecoin" fell below its dollar-pegged value in May. TerraUSD was advertised as pegged to the U.S. dollar to prevent sharp fluctuations in price, but authorities say token prices and Luna were linked.

South Korean authorities have launched several criminal investigations into the crash, which caused some investors to lose their savings. Kwon's arrest was another example of the growing campaign against cryptocurrencies after multiple''scandals in the sector, including the collapse of FTX and the detention of its founder Sam Bankman-Fried.

Reference: Al Jazeera and news agencies.