Prosecutors hope Interpol will help them capture Do Kwon and other TerraForm Labs representatives. Various agencies, which have targeted Terra after the collapse of UST, suspect that LUNA was part of a pyramid scheme.
A South Korean court recently issued an arrest warrant against Do Kwon, the founder of TerraForm Labs. It is relevant to remember that this company is the issuer of the TerraUSD (UST) stablecoin.
The warrant for the arrest of Do Kwon includes Nicholas Platias, a co-founder of TerraForm Labs, and Han Mo, an employee of the company. The regulatory authorities allegedly charge the businessman and his team with violating the Capital Market Act.
Local media have reported that Do Kwon might be in Singapore, highlighting that the arrest warrant is valid for one year. South Korean prosecutors hope Interpol will help capture the cryptocurrency developer and other representatives of TerraForm Labs.
The Terra Ecosystem Continues to Face Problems after Its Collapse
The stablecoin UST of the Terraform Labs project collapsed in early May, losing its parity with the US dollar. Its price dropped, dragging the native token of the platform with it.
TerraUSD and Terra (LUNA) were among the top 10 crypto assets by market capitalization. Amid the collapse of the Terra ecosystem, which caused many cryptocurrencies to die, investors lost about USD 40 billion.
The developers behind the two cryptocurrencies released a new version of LUNA ad distributed new coins among the affected users. Many users reported that the amount they received was insufficient to cover their losses, proving the failure of the airdrop.
The situation worsened when the value of the LUNA 2.0 token started to decline immediately after its launch. Seeking to remedy that, the developers launched other token airdrops, scheduled to last until October 4th.
Despite His Previous Failing Projects, Do Kwon Denies the Accusations
In late June, the South Korean authorities told the developers of Terra to stay in the country. In August, the Ministry of Justice approved a request from Seoul prosecutors to restrict the movements of Do Kwon when he is in Korea.
Amid regulatory pressure, the developer hired lawyers, denying any accusations of fraud against him despite his previous failing projects.
South Korea Views the Terra (LUNA) Case as a State Problem
Terraform Labs is a South Korea-based company that has caused thousands of people to lose money in the country since its beginning. Due to the high number of victims nationwide, the government views this issue as a state problem, taking measures against it.
South Korean prosecutors have sought evidence to address the Terra (LUNA) case for some time. In July, they searched 15 different locations as part of the active investigation. On the list were also seven cryptocurrency exchanges, the home of Daniel Shin and the Chai Corporation.
The collapse of UST, which caused many South Koreans to lose capital, has led various agencies to target Do Kwon and the team behind Terra. They suspect that LUNA was part of a pyramid scheme, which has led hackers from the group Anonymous to help bring them to justice.
By Alexander Salazar
