Do Kwon, the South Korean entrepreneur behind the $40bn collapse of the cryptocurrencies terraUSD and Luna, has been charged with fraud in the United States following his arrest in Montenegro.

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

Kwon, 31, was arrested in Montenegro earlier on Thursday along with another South Korean citizen, the European country’s interior ministry said.

“The person is suspected of being one of the most wanted fugitives, South Korean national Do Kwon, a co-founder and CEO of the Singapore-based Terraform Labs,” Interior Minister Filip Adzic wrote on Twitter.

“The former cryptocurrency king who is behind losses of over $40 billion, has been apprehended at the Podgorica airport with forged documents,” Adzic added.

Kwon and the other man were stopped while attempting to board a flight to Dubai using “falsified travel documents from Costa Rica, which was established also by Interpol checks”, the ministry said in a statement.

South Korean authorities said last year said that the crypto founder had travelled to an unknown country via Dubai after leaving Singapore.

The criminal charges follow a related civil case against Kwon and his Singapore-based company Terraform Labs that was announced last month by the US Securities and Exchange Commission.

A lawyer for Kwon did not immediately respond to a request for comment, the Financial Times and Wall Street Journal reported.

Holders of TerraUSD and Luna, its floating sister currency, lost about $40bn after the so-called “stablecoin” plummeted past its $1 peg in May.

TerraUSD was marketed as being pegged to the US dollar to prevent wild price swings, but authorities have alleged the values of the token and Luna were linked.

South Korean authorities opened multiple criminal investigations into the crash, which saw some investors lose their life savings.

Kwon’s arrest is the latest example of a growing crackdown on cryptocurrencies following multiple scandals in the sector, including the collapse of FTX and arrest of its founder Sam Bankman-Fried, Al Jazeera reports.