According to a Bloomberg report, a South Korean Court has issued an arrest warrant against failed Terra cofounder Do Kwon.
This is the latest in the series of domino effect-like events that have followed the collapse of the Terra ecosystem. This news comes four months after the crash of the Terra ecosystem and its algorithmic stablecoin TerraUSD (UST).
As per the reports, the court has ordered the arrest of Do Kwon together with five other people. They are charged with violating the Capital Market Act after investigations to determine whether the terra tokens qualify as securities.
Currently, Kwon and the other five individuals associated with the Terra ecosystem are reportedly living in Singapore.
Recall that Kwon had explained that the decision to shift base to Singapore was due to favorable policies and its affordable cost of living. This was after he dismissed claims of having prior knowledge of the impending disaster in the wake of the crash.
Afterward, the authorities secured a travel ban against the Kwon. This meant he must notify the authorities upon his entry into the country.
Do Kwon in trouble with authorities
With a validity of one year on the warranty, prosecutors will pursue all means to prosecute Kwon.
Since Singapore is not on South Korea’s list of bilateral extradition treaties, prosecutors have sought the help of Interpol.
With the help of Interpol, prosecutors have requested a Red Notice to extradite Kwon to South Korea. The authorities are also considering nullifying his South Korean passport.
Terra’s “unstable” stablecoin was promoted as a safe coin with its value pegged to the dollar, however, that was not the case as the algorithmic stablecoin crashed to almost zero back in May. The crash wiped out about $45 billion of investors’ funds from the crypto market.
In the wake of the crash, a group of aggrieved investors contracted LKB & Partners to take legal action against Kwon.
Unfortunately, the crash of the terra ecosystem resulted in a cataclysmic fallout for the broader crypto industry. Both Celsius and Voyager went bankrupt and filed for bankruptcy protection due to their exposure to the fallen terra ecosystem.
Unfortunately, all of Kwon’s rescue plans for LUNA were not enough to save the cryptocurrency from going down.