Do Kwon and other Terra employees, who are all headquartered in Singapore, a country without an extradition agreement with South Korea, had their passports revoked after a request from South Korean prosecutors.
The founder of Terraform Labs, the blockchain company that created the defunct Terra Classic blockchain, Do Kwon, has taken to Twitter to dispel rumors that he is on the run and to make it clear that his team has nothing to hide.
He added that: “ 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.”
On Crypto Twitter, there were rumors that the 31-year-old computer scientist was hiding out and being sought after by a number of law enforcement agencies after being charged with fraud and violating a number of financial laws.
The Terra ecosystem, worth $45 billion, collapsed in May, and South Korean authorities started looking into it right once. Around the end of May, the authorities made the initial decision to create a new crypto monitoring authority in order to stop situations like Terra from happening again.
Since the demise of the algorithmic stablecoin Terra USD (USTC) and the Terra Classic (LUNC) token, formerly known as Terra (LUNA), in May, police have searched 15 places of interest, including cryptocurrency exchanges and businesses connected to the case.
Do Kwon is one of several Terra employees accused of violating the country’s Capital Markets Act, which defines Terra Luna ecosystem tokens as “investment security contracts.”
Prosecutors in South Korea claim that Do Kwon continued to sell USTC and LUNA without warning investors about the possibility that their prices would fall at the same time, which would have constituted fraud.
They cited Do Kwon’s claims, such as “If I deposit Terra with Terraform Labs, I will pay an interest of 19.4%,” as proof that Do Kwon knew in advance that investments in the Terra ecosystem would not be sustainable yet continued to operate in a similar manner in order to raise money.
Last month, Todayincrypto reported that Do Kwon had hired legal representation from a nearby South Korean law office to defend him against the accusations leveled against him.