South Korean Court Issues Arrest Warrant for Terra Co-founder Do Kwon over Crash of Terra Stablecoin
Do Kwon, the founder of the cryptocurrency-based platform Terraform Labs, has been granted a warrant for his arrest by an official located in South Korea. The collapse of Terraform Labs earlier this year resulted in a massive sell-off of markets for crypto.
In a message sent by the prosecutor’s office, a judge located in Seoul is granting a warrant against Do Kwon and five other people on charges that involve infractions of the laws of Korea that regulates the capital markets. The accusations were issued in connection with the issue in the case of warrant.
According to the the Public Prosecutor’s Office, six the suspects could be located in Singapore. Do Kwon did not respond immediately to an email requesting an explanation upon receiving it.
In the event that TerraUSD is also known as UST did not maintain its dollar peg, and created a system that he built to a halt and he was in the in the middle of one of most disastrous events in history of cryptocurrency. Digital assets market experienced major trust losses in May, and hasn’t yet recovered much of the losses.
Do Kwon’s followers called them “Lunatics” with reference to Luna the other symbol that was part of the ecosystem he was a part of to create. This was in recognition of the fact that Luna was component to the entire ecosystem. Both currencies’ prices fell to virtually zero and is a far away from the $60 billion they once were worth between them.
Following the incident Do Kwon moved on to creating a new version called Luna. According to the data provided by CoinGecko in the wake of news of the warrant the cost of the new currency dropped by up to 45 percent, settling at the lowest level of $2.40. The value of the coin in circulation dropped 42% and landed as $413.2 million.
Stablecoins are digital coins which are tied to an asset, such as the dollar. The unraveling of Terra caused inquiries of South Korea and the United States in addition to the latest regulatory scrutiny of stablecoins. Stablecoins are an alternative for investors who wish to protect their wealth from currencies with greater volatility. In addition, stablecoins make it easy to transfer funds to cryptocurrency exchanges.
The investigation into allegations of illicit activities that contributed to the demise of TerraUSD continued, the authorities executed an investigation at the home of Daniel Shin, one of the co-founders of Terraform Labs.
Kwon has said that he will collaborate in the future, if the right time comes. Kwon said, “Life is long,” when asked about the possibility of jail time in an interview with cryptocurrency media company Coinage.