The fallout from Terra Luna continues. Interpol has issued a red notice to authorities around the world to arrest Terraform Labs co-founder Do Kwon.
Kwon faces fraud charges for the collapse of the company’s US$40 billion value. Quoted from Bloomberg on Monday (26/9), South Korean officials accused Kwon and five other people of crimes, including violations of capital market law.
Initially promising, Terra Luna’s value at the time plummeted to almost zero, whereas in March it reached a high of USD 119. That led to high losses for the trusting buyers.
Later, five Korean crypto investors filed a lawsuit against Kwon and Terraform Labs co-founder Daniel Shin for alleged fraud and other financial regulation violations. The five investors suffered a total loss of 1.4 billion Won (IDR 16.1 billion).
Kwon is believed to be in Singapore, but local authorities have stated he is not there. Now, Interpol has reportedly stepped in to track down Do Kwon’s location and freeze him.
A red notice is essentially a request to law enforcement around the world to track and detain someone. It is currently unknown where Do Kwon is.
Terraform Labs is behind TerraUSD and its sister, Luna. The value of both plummeted in May 2022 and caused huge losses in a crypto market that was under pressure from monetary tightening.
Terra’s plummeting value also led to the collapse of Three Arrows Capital, Voyager Digital, and Celsius Network. South Korean prosecutors said Kwon’s arrest warrant was issued because there was evidence the 31-year-old man was trying to flee.
Do Kwon and his friend, Daniel Shin, formed Terraform Labs in 2018. Do Kwon is a computer science graduate from Stanford University. He studied at the college from 2010-2015.
He was also included in Forbes Asia’s 30 Under 30 list in 2019. He made the list for attracting 40 million users since 2018. Now his fate has completely changed 180 degrees.
Terra Luna boss Do Kwon’s trail before becoming an Interpol fugitive
According to Bitcoin.com, Do Kwon is said to have closed Terraform Labs in Korea a few days before the value of LUNA and Terra USD collapsed. The company, headquartered in Busan, was dissolved, as well as its Seoul branch office, in a meeting with shareholders last April 30.
Terraform Labs is actually a company incorporated in Singapore, but is also registered in South Korea as Terraform Labs Korea, which has its headquarters in Busan and a branch office in Seongdong District, Seoul.
The Seoul South District Prosecutors’ Office then launched an investigation into Terraform Labs, the organization behind the Terra stablecoin project led by Do Kwon.
Now, Do Kwon is a fugitive from Interpol because South Korean authorities consider him to have violated the law. Initially thought to be in Singapore, it turned out that he was not there so the authorities were still tracking him down.
However, Kwon through his Twitter account said he was ready to defend himself and clarify the facts. “We have upheld a very high level of integrity,” Kwon said on Twitter.
“I’m writing code in my living room, hbu,” Kwon’s tweet read, as the Terra Luna boss replied to someone’s tweet asking about his whereabouts.
In fact, as quoted from the Financial Times, Wednesday (9/28/2022), through his social media account, Do Kwon said he made no effort at all to hide.
He also said that he still goes for walks and to the mall. Through social media posts, he is currently still writing code in the living room of his house.
This post seems to answer previous reports that Do Kwon is currently the most wanted figure by law enforcement around the world.
Later after being caught, the perpetrator or fugitive will await extradition or other legal action.
Big crypto bookie who collapsed as Terra Luna plummeted
Terra Luna plummeted with the crypto ‘winter’, a phenomenon where the value of these assets falls due to several factors. Terra stablecoin (UST) also went into freefall to below US$1.
This has had a ripple effect on crypto platforms. Companies like Voyager and Celsius even declared bankruptcy in just two weeks.
Other companies were also allegedly affected by the collapse in asset prices. Most recently, Zip Max announced that it has temporarily suspended withdrawals.
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They explained that one of the factors was financial problems that occurred with the partners. However, Zipmex did not mention who the partner was.
Quoted from Cointelegraph, Zipmex is rumored to be channeling funds to Babel Finance for returns.
However, Babel stopped withdrawals last June due to unusual liquidity pressures. Last month, the Hong Kong-based company was also affected by the Terra market crisis.