A court in South Korea has issued an arrest warrant for Do Kwon. The founder of Terraform Labs created havoc and is therefore facing charges from all sides.
LUNA and TerraUSD
The court in Seoul issued a warrant against Do Kwon and five others. They are accused of violating the National Capital Market Law. This is according to a text message sent by the prosecutor. Bloomberg reports the news.
All six people are currently in Singapore, prosecutors said. Do Kwon did not respond. Meanwhile, he is active again on Twitter and also working on new projects.
🛠
— Do Kwon 🌕 (@stablekwon) September 9, 2022
In May, the entire Terra project collapsed. The TerraUSD stablecoin lost its peg with the dollar. As a result, thousands of bitcoin had to be liquidated. In the weeks and months before, Kwon bought more than 80,000 BTC from the market, which were thus dumped back onto the market in very short order.
Snowball effect
The collapse of TerraUSD and LUNA created a snowball effect, causing prices of all cryptocurrencies to fall further. This put Three Arrows Capital (3AC) and Celsius back underwater, which thus impacted the entire industry.
Both LUNA and UST dropped to around zero, evaporating $60 billion in value. Investors lost a lot of money and investigations were launched in South Korea and the United States, among others.
Regulations around stablecoins were also tightened in some countries.
In July, prosecutors raided the home of Daniel Shin. He was the co-founder of Terraform Labs. In the meantime, it was also revealed that an employee stole a bag full of bitcoin.
Developers were also banned from travelling by the Financial and Securities Crime Joint Investigation Team. Somehow, the six developers to be arrested still ended up in Singapore.
