Digital Assets: South Korean Court Issues Arrest Warrant For Terraform Founder Do Kwon

September 14, 2022 | Digital Assets, Latest News, News

Investors lost $60 billion after Terra collapsed earlier this year.

A Reuters report said a South Korean court has issued an arrest warrant for Do Kwon, the founder of Terraform Labs, which promoted the UST stablecoin. A text message from the Financial Crimes Unit of the Supreme Prosecutors Office (cited by Bloomberg) said the warrant included five additional persons. The accused allegedly violated the Capital Markets Act.

According to FT, the arrest warrant did not include Daniel Shin, the co-founder of Terraform Labs.

Prosecutors allege Kwon committed financial fraud and that the UST stablecoin was an investment security under South Korean capital market laws. Kwon, and five other accused, are believed to be in Singapore.

FT, which quoted a spokesperson for the Seoul Southern District Prosecutors Office, said authorities were evaluating various options for the arrest and extradition of Kwon from Singapore given that South Korea does not have a bilateral extradition treaty with the island nation. These actions might include cancelling his South Korean passport and roping in Interpol for his arrest.

The issue of an Interpol red notice against Kwon would cause Kwon “serious difficulties” in travels outside of Singapore, according to a lawyer cited by FT.

Moreover, Singapore could invoke the Mutual Assistance in Criminal Matters Act for cooperating with Korean authorities.

Reportedly the South Korean action follows on the basis of complaints against Kwon and his company on behalf of 81 investors alleging that they were cheated. The business is alleged to have lured in investors with promises of a 20% yield on their money.

A number of suicides in South Korea were reported in the media, apparently as a fallout of the terra/luna collapse and the resulting losses inflicted on investors.

Related Story: The Terra (LUNA) Implosion – Sidelights

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