Korean Authorities Reportedly Make First Arrest in Terra Case
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After months of investigation, South Korean authorities have arrested Terraform Labs’ head of general business operations, Yoo Mo, and accused him of violating the Capital Markets Act, Forkast News reported on 6 October.
According to the publication, Seoul’s Southern District Prosecutor’s Office has issued a bench warrant — which allows authorities to keep a person considered a flight risk detained during a trial — for Yoo Mo, accusing him of violating the Capital Markets Act, fraud, breach of duty, and more. The arrest warrant for the Yoo Mo was issued back in September, alongside those for Do Kwon and four other individuals connected to the collapse of the Terra’s ecosystem.
Korean prosecutors have alleged that Yoo Mo used bot programming to manipulate the market price of the TerraUSD (UST) stablecoin — now known as TerraUSD Classic (USTC) — and deceive investors that transactions were actively taking place. Yoo Mo is believed to be part of the closest inner circle of Do Kwon, who has been on the run from South Korean authorities for some time now.
On Wednesday, South Korea’s Ministry of Foreign Affairs posted a public notice on its website — due to an “inability to deliver” the order — asking Do Kwon to hand over his passport in the next 14 days. If not returned on time the passport will be invalidated, meaning Do Kwon will find it difficult to leave the country he is currently residing in.
The same day, South Korean media outlet News1 reported that prosecutors had frozen 56.2 billion won (around $40 million) of crypto assets in accounts on OKX and KuCoin exchanges that were believed to belong to Do Kwon. The individual quickly took to Twitter to deny the media report:
- 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.
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- Terraform Labs’ founder Do Kwon and CFO Han Chang-Joon were found guilty and sentenced to four months in prison for their use of forged Costa Rican passports.
- The Basic Court in the country’s capital Podgorica clarified that the time both individuals spent under detention in the country will also be taken into account.
- The decentralized lending protocol paused all its markets after an attacker used a manipulated price oracle to steal 442 ETH from the platform.
- Blockchain security firm BlockSec noted that the attacker used a reentrancy vulnerability to manipulate a price oracle that determined the prices of assets in a liquidity pool on Balancer.