Do Kwon, the creator of the Terraform Labs cryptocurrency ecosystem, whose collapse earlier this year prompted a global crypto meltdown, has an arrest order issued by a judge in South Korea.
Do Kwon and five other people are wanted in connection with claims that they broke the country’s capital markets regulations according to a Bloomberg report. The prosecutor’s office reported that Singapore is the location of all six people.
The collapse of the TerraUSD stablecoin as part of the unwinding of the Terra platform in May shook confidence in the digital asset market, which has yet to recoup much of the losses.
The community of the Terra ecosystem dubbed themselves “Lunatics” in honor of Luna, another token that was a component of the ecosystem he helped establish. When TerraUSD, also known as UST, collapsed off its dollar peg and brought down the ecosystem he had established, he found himself in the epicenter of one of cryptocurrency’s largest blow ups.
The value of both tokens, which were worth a total of $60 billion, decreased to practically zero in May. Developers then hard forked the chain in an effort to make up for investment losses, and a new network was built. The community helped to recover the price of the vintage chain token Terra Classic (LUNC), which recently peaked at roughly $2.5 billion.
The collapse of Terra led to inquiries in South Korea and the US, as well as increased regulatory scrutiny of stablecoins, which are digital tokens backed by assets like the dollar. Stablecoins make it simpler to shift money onto cryptocurrency exchanges and are a popular vehicle for investors looking to lodge capital away from more volatile coins.
Prosecutors searched Daniel Shin’s home in July as their investigation into claims of illegal activity leading to the demise of TerraUSD progressed. Daniel Shin is a co-founder of Terraform Labs.
Kwon stated in an interview with cryptocurrency media start-up Coinage when asked about the possibility of going to jail “Life is long.” Kwon has declared that he intends to cooperate when the time comes.