South Korean Court issues arrest warrant against Terra Co-Founder Do Kwon

Terra Co-Founder Do Kwon

By Parikshit MishraOliver KnightFelix Im, Coindesk

14th September 2022 – (Seoul) A South Korean court has issued an arrest warrant against Do Kwon, the co-founder of the now defunct stablecoin issuer Terraform Labs, according to the financial crimes unit of the Supreme Prosecutors’ Office.

The warrant included five additional individuals, Bloomberg News reported, citing a text message from the prosecutors’ office. They are charged with violating the Capital Markets Act, the report said.

The warrant comes four months after the collapse of the $40 billion Terra ecosystem and its algorithmic stablecoin (UST), which was the first domino to fall in this year’s crypto winter.

The contagion that followed caused an industry-wide fallout, with crypto lender Celsius Network and crypto broker Voyager Digital filing for bankruptcy as the value of digital assets slumped by more than 50% from their highs.

Singapore-based hedge fund Three Arrows Capital was another firm that filed for bankruptcy after the extent of its exposure to the Terra network was exposed. The implosion of Three Arrows left a trail of troubled loans across the crypto industry, with billions being owed to creditors.

In his first public interview last month, Kwon had maintained that he is cooperating with authorities.

Terra didn’t immediately respond to a request for comment.

Kwon also reiterated his commitment to the Terra ecosystem and its re-launched terra token (LUNA). The token has slumped by 16.7% over the past hour.