Ali Raza
The CEO of troubled Terraform Labs, Do Kwon, has been labeled a fugitive by South Korean prosecutors.
Kwon, who left South Korea for Singapore towards the end of April 2022, had a warrant issued for his arrest last week.
Do Kwon labeled a fugitive by South Korean prosecutors
The Seoul Southern District Prosecutor’s Office previously issued an alert saying that Do Kwon left for Singapore towards the end of April after the Terra Luna debacle.
His family also left the country shortly after and the majority of the company’s former executives also left for Singapore.
The Terra Luna cryptocurrency plunged in May following the de-pegging of the TerraUSD stablecoin, with around $60 billion worth of funds lost following the collapse.
Regulators have since been adamant about finding the root cause of the drastic price drop.
The prosecution said that the arrest warrant was issued for fear that the suspect would not comply with the request for an appearance.
The prosecution claim that Kwon was concerned about “not cooperating with the investigation at all during the search and seizure process, and by telling his lawyer that he does not intend to appear immediately at the prosecution.”
On September 17, the Singapore Police announced to the AFP that it would support the Korean National Police Agency in compliance with Singaporean domestic laws and international obligations – local police also confirmed that Kwon was not in Singapore.
However, Kwon then took to Twitter to dismiss the allegations made against him by South Korean authorities, stating that he was not on the run and did not have anything to hide.
Dear CT – I will tell you what i am doing and where i am if:
1) we are friends
2) we have plans to meet
3) we are involved in a gps based web3 gameOtherwise you have no business knowing my gps coordinates
— Do Kwon (@stablekwon) September 17, 2022
Kwon said:
“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.”
The prosecution maintains that the arrest warrant was issued because there was a fear that Kwon would not comply with the prosecution’s requests, like failure to cooperate with the procedure for an investigation like search and seizure.
The prosecution also asserts that it was in the process of confirming the whereabouts of Kwon.
The Collapse of Terra Luna
The Terra Luna ecosystem collapsed in May this year. The collapse started with the TerraUSD algorithmic stablecoin losing its peg. The fall of the stablecoin caused a plunge in LUNA prices when all cryptocurrencies were on a downtrend.
After the collapse, Do Kwon and Terraform Labs created a Luna 2.0 involving a new blockchain and new tokens. However, given the failure of the original Terra Luna blockchain, investors were not convinced that the new Terra Luna would stand the test of time and it has failed to reattain its former glory, currently trading at less than $3.
Before its collapse, Terra Luna supported one of the best crypto staking platforms. The Anchor protocol supported an interest rate of 20% annually. Still, some crypto community members believe the interest was unsustainable, and it was behind the meteoric rise of the LUNA cryptocurrency.
Before its plunge, LUNA was trading near all-time highs, at around $80 per token, and was among the top ten largest cryptocurrencies by market cap.
The collapse shook the crypto industry, and a ripple effect caused several other projects that had invested in LUNA, such as Three Arrows Capital, to fall.
Related
- Arrest Warrant Issued for Terra Founder Do Kwon According to Latest Reports
- Do Kwon Owes 100 Billion Won in Tax, Investigated for Extortion
- What is Terra LUNA? Why did it Crash 99.9%?
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This article was written for Business 2 Community by Ali Raza.
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