Arrest Warrant for Terra’s Do Kwon Issued by Seoul Court
- South Korean authorities have issued an arrest warrant for Terra co-founder Do Kwon and five other individuals, alleging they had violated the Capital Markets Act.
- The news quickly affected Terra’s re-launched LUNA token, which saw its price fall down by 28% in the past 24 hours.
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South Korean authorities have issued an arrest warrant for Do Kwon, the co-founder of now defunct stablecoin issuer Terraform Labs, Bloomberg reported on 14 September.
The publication cited a “text message” from South Korea’s prosecutor’s office, which explained that a court in Seoul had issued a warrant for the arrest of Kwon and five other people, alleging they had violated the country’s Capital Markets Act. The prosecutor’s office also noted that all six individuals were currently located in the port city of Singapore.
Terraform Labs is the entity behind the $40 billion Terra ecosystem, which collapsed back in May after its algorithmic stablecoin TerraUSD (UST) lost its peg to the U.S. dollar, reaching an all-time low of $0.006 in June. The collapse of UST also affected Terra’s native token LUNA — once a top-10 cryptocurrency — which at one point dropped in price by 99%.
This event triggered a dominos effect, which negatively affected the majority of the cryptocurrency market. Singapore-based crypto hedge fund Three Arrows Capital (3AC) was hit especially hard by the collapse of Terra, with the company filing for bankruptcy shortly after its exposure to LUNA was revealed. This, in turn, resulted in crypto lender Celsius and crypto broker Voyager Digital to file for bankruptcy after they were unable to cover their losses from the exposure to 3AC, leading to the current state of the entire crypto market.
The news of Do Kwon’s arrest warrant quickly affected Terra’s LUNA token — which was re-launched on the Terra 2.0 blockchain back in May — with its price falling by 28% in the past 24 hours.
- One of the largest South Korean commercial banks, KEB Hana Bank, partnered with crypto custodian BitGo in order to set up a new crypto custody venture in the country.
- The new venture, which will use BitGo’s crypto security expertise and Hana’s experience in financial services and compliance, is expected to launch in the second half of 2024.
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- Blockchain network Terra said its website was compromised by hackers over the weekend, and warned users against ongoing phishing scams.
- The platform later froze its website to prevent the hackers from exploiting it, and reminded users to avoid websites with the terra.money domain for now.
- The team behind Multichain confirmed that their CEO was detained in China on 21 May, and that all of his electronic devices were confiscated by the local police.
- The CEO’s sister moved the project’s remaining funds to wallets under her control on 9 July, and several days later was also detained by the police, leaving the team with no funds.