South Korea said Interpol requested law enforcement worldwide to locate and arrest Terraform Labs co-founder Do Kwon, who faces charges related to the $60bn wipeout of cryptocurrencies he created.
Prosecutors in Seoul said Monday in a text message that the international police organisation has issued a Red Notice for Kwon, the latest inglorious chapter of a $2-trillion rout in digital assets that exposed hugely risky practices. Neither Interpol, Kwon nor Terraform Labs immediately replied to emails seeking comment.
South Korean officials have accused Kwon and five others of crimes including breaches of capital-markets law. Kwon earlier this year moved from South Korea to Singapore, where his now-collapsed Terraform Labs had a base, but his location became unclear after the city-state on September 17 said he’s no longer there. Prosecutors subsequently stepped up their efforts to find him.
Terraform Labs was behind the TerraUSD algorithmic stablecoin and its sister token Luna. Both coins imploded in May and sparked huge losses in crypto markets, which were already reeling from tightening monetary policy.
Digital assets have yet to recover and regulators globally are poring over the wreckage to see how to avoid a repeat. In South Korea, earlier ardour for crypto is being usurped by growing disdain.
Terra’s collapse and the broader market rout led to the unravelling of Three Arrows Capital, a once high-flying crypto hedge fund. Contagion also buffeted lenders and brokers such as Voyager Digital and Celsius Network.
TerraUSD, also known as UST, was meant to keep a constant value of $1 in a complex arrangement involving Luna. But the system depended on confidence in the ecosystem created by Kwon, a 31-year-old who studied computer science at Stanford. Once the trust disappeared, the arrangement collapsed.
South Korean prosecutors have said they issued an arrest warrant for Kwon in part because there was “circumstantial evidence of escape” ever since he left for Singapore. They also took issue with his claim that he was co-operating.
“We are in the process of defending ourselves in multiple jurisdictions — we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months,” Kwon has previously said on Twitter.
The Terra community split after the collapse of TerraUSD. The original tokens were rebranded as Terra Luna Classic and TerraClassic USD. Kwon, meanwhile, started a new Terra blockchain with a new Luna as its only token.
The new Luna token is down 16% in the last 24 hours, data from CoinGecko show. Luna Classic shed almost 20%. TerraUSD never recovered its dollar peg, but still trades on some venues and was nearly 14% lower.
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