One of the most resonant events that happened in 2022 was the catastrophic fall of Luna and TerraUSD. It is therefore no surprise that the founder of the Terra blockchain ecosystem began to be suspected of fraud. Seoul has issued an arrest warrant for Do Kwon, as a result of a joint US-South Korean investigation.
Huge losses of retail investors and small crypto brokers, the bankruptcy of Celsius Network and Voyager Digital, the liquidation of Three Arrows Capital are just some of the consequences that the collapse of the Terra ecosystem has led to. The catastrophe has attracted the close attention of regulators to stablecoins; it became one of the reasons for a serious crisis in the crypto world and undermined confidence in the sector as a whole. The struggle with the results of the crash of two Terra tokens is still ongoing even after four months.
According to the Seoul Southern District Prosecutor's Office, Do Kwon, his family members and key employees of Terraform Labs arrived in Singapore in April and May. The Korean representative office of Terraform Labs Korea was liquidated about that time.
Sources in the prosecutor's office said that after the investigation was launched, Do Kwon didn’t cooperate with the investigation. Moreover, a non-cooperation message was received from his lawyer in August.
The Terraform Labs platform and its founders are accused of fraud and tax evasion. Numerous complaints regarding the company's activities were received not only from users, but also from employees. Users accused Terraform Labs of losing their funds due to its use of the Ponzi scheme, while employees claimed that top managers completely ignored warnings about possible risks.
In mid-September, prosecutors in South Korea reportedly issued an arrest warrant for Do Kwon and five other suspects, including one of the platform's co-founders. Thus, law enforcement authorities planned to extradite the defendants who are in Singapore. But the local police said that the principal suspect was not on the territory of the state.
"Currently, we are in the process to locate the whereabouts of suspect Do Kwon and apprehend him," a South Korean prosecution official said.
Do Kwon himself commented on the situation on Twitter. He stated that providing his GPS coordinates would be appropriate when chatting with friends, scheduling a meeting or playing Web3 games with GPS coordinates.
Source: Twitter
The CEO of Terraform Labs also stated about undue interference with his privacy and emphasized that he is not hiding from law enforcement:
"I am not 'on the run' or anything similar - for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide.”
Source: Twitter
Source: Twitter
Do Kwon claims that the company is working on its own defense in several jurisdictions at the same time and expects the results of an honest investigation in the next few months. The co-founder of Terraform Labs concluded his discussion by joking that he hadn’t been running for sometime now and should possibly start cutting his calories.
