Terra Founder Do Kwon faces arrest as South Korean court issues arrest warrant
In Brief
South Korean authorities issued a warrant for Terraform co-founder Do Kwon and five other individuals, including Nicholas Platias.
A possible red notice may be issued.
South Korean court has issued an arrest warrant for Terraform’s co-founder Do Kwon and five other individuals. Terraform is the company behind Terra and Luna tokens, whose prices crashed in early May and have not stabilized since.
First arrest warrants in the Terra case
As Do Kwon is currently in Singapore, prosecutors may require help from Interpol to carry out the arrest, a local news source Chasun reports. Since the arrest warrant is valid for just one year, South Korean authorities may request Interpol issue a red notice. In an interview, the Terraform co-founder claimed the investigators had not contacted him regarding the investigation into the company.
Apart from Kwon, the Seoul Southern District Prosecutor’s Office is also looking to arrest Nicholas Platias, another founding member of Terraform Labs, and a Terraform employee Han Mo. The identity of the other three individuals has not been revealed to the public.
According to another source, the charges include alleged violations of the Capital Markets Act. Prosecutors believe Terra and Luna could be considered “investment contract securities” under the legislation. Simply put, people invested in the tokens believing they would make a profit. The Terra arrest warrants are the result of the alleged violations.
The Luna collapse and the aftermath
Terraform has been under the microscope since its algorithmic stablecoin Luna de-pegged from the dollar, and the price never recovered. It was previously reported the team behind the Luna blockchain had been aware of the potential risks the project carried. In fact, people working on the project since 2019 allegedly claimed that the founder has been aware of the potential Terra collapse at any time as the pilot model had failed.
“In hindsight, I think we should have been more skeptical,” Kwon said in an interview, admitting that he had not done adequate risk assessment because he believed the Terra blockchain “was simply going to work.”
The $60 billion crypto ecosystem lost most of its value in a matter of days, but the company’s creators coined a plan following the meteoric crash of Luna and TerraUSD. They launched Terra 2.0, rebranding the old chain as Terra Classic, and airdropped the new tokens. Prices plummeted nearly instantly, but the new token Terra LUNA was seemingly doing better—regaining its value and reaching the price at launch.
However, just as the prices started suddenly rising, they’ve also experienced a huge drop over the last 24 hours, seeing a 35.41% price drop.
To some, Terra LUNA seemed too good to be true from the start, and unfortunately, what unfolded in May proved it to be true. The aftershocks of the Luna collapse were felt across the cryptocurrency scene.
South Korean court has issued an arrest warrant for Terraform’s co-founder Do Kwon and five other individuals. Terraform is the company behind Terra and Luna tokens, whose prices crashed in early May and have not stabilized since.
As Do Kwon is currently in Singapore, prosecutors may require help from Interpol to carry out the arrest, a local news source Chasun reports. Since the arrest warrant is valid for just one year, South Korean authorities may request Interpol issue a red notice.
In an interview, Do Kwon claimed the investigators had not contacted him regarding the investigation into Terraform.
Apart from Do Kwon, the Seoul Southern District Prosecutor’s Office is also looking to arrest Nicholas Platias, another founding member of Terraform Labs, and a Terraform employee Han Mo. The identity of the other three individuals has not been revealed to the public.
According to another source, the charges include alleged violations of the Capital Markets Act. Prosecutors believe Terra and Luna could be considered “investment contract securities” and thus fall under the legislation. Simply put, people invested in the tokens believing they would make a profit.
The $60 billion crypto ecosystem lost most of its value in a matter of days, but the company’s creators coined a plan following the meteoric crash of Luna and Terra. They launched Terra 2.0, rebranding the old chain as Terra Classic, and airdropped the new tokens. Prices plummeted nearly instantly, but the new token Terra LUNA was seemingly doing better—regaining its value and reaching the price at launch.
However, just as the prices started suddenly rising, they’ve also experienced a huge drop over the last 24 hours, seeing a 35.41% price drop.
To some, Terra LUNA seemed too good to be true.
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Karolina is a writer and journalist with a background in literary studies. She loves exciting tech solutions and art, and NFTs are often a perfect amalgamation of the two. Outside of work, she’s a plant mom, a vintage fashion enthusiast, and a gamer.
More articlesKarolina is a writer and journalist with a background in literary studies. She loves exciting tech solutions and art, and NFTs are often a perfect amalgamation of the two. Outside of work, she’s a plant mom, a vintage fashion enthusiast, and a gamer.
