Key Takeaways:
- Do Kwon, the creator of the Terraform Labs cryptocurrency ecosystem is the subject of an arrest warrant issued by a court in South Korea.
- Do Kwon and five other people are wanted by a Seoul court on suspicion of violating the country’s capital markets law, among other charges.
In accordance with the financial crimes division of the Supreme Prosecutors’ Office, a South Korean court has issued an arrest order against Do Kwon, the co-founder of the once-thriving stablecoin issuer Terraform Labs.
The warrant also names five additional people who are charged with the same offenses, Bloomberg stated. According to the prosecutor’s office, all six of them are in Singapore. Unable to get in touch with Kwon for comment.
Kwon has declared that, if necessary, he will work with law enforcement agencies. Do’s stablecoin system crashed in May, resulting in losses of $45 billion and sparking a string of defaults and bankruptcies in the nascent cryptocurrency investment sector.
A wider cryptocurrency sell-off that the market for digital assets has yet to recover from was started by the contentious stablecoin UST, which was intended to be tied at 1:1 to the U.S. dollar. UST decoupled from its target price in mid-May.
Kwon had insisted he is helping the authorities in his first public interview last month. Do have impliedly blamed the collapse on an anonymous insider who had allowed others to exploit a weakness in its system in an interview with crypto media firm Coinage last month.
Do respond, “If you’re asking me if there was a mole at TFL, that’s probably a ‘Yes. “I would respond that the answer is “Yes” if you ask me whether anyone sought to take advantage of that particular opportunity.”
Due to Terra’s collapse, regulatory oversight of stablecoins, which are digital tokens backed by assets like the dollar, has increased in both South Korea and the US.
Stablecoins make it simpler to shift money onto cryptocurrency exchanges and are a heavily talked instrument for investors looking to lodge capital away from more volatile coins.
In June, the hacktivist collective Anonymous took to YouTube to demonstrate their dissatisfaction with Do Kwon’s alleged wrongdoings. Anonymous YouTube channel posted a video declaring war on Do Kwon, a crypto engineer and Terraform Labs co-founder.
