Last Updated on September 26, 2022 by Bitfinsider
A Red Notice has been issued for Kwon by the international police organization, according to Seoul’s prosecutors in a text message sent on Monday. Kwon is the latest humiliating incident in a $2 trillion digital asset meltdown that exposed extremely dangerous business practices. Request for comments from Interpol, Kwon, or Terraform Labs did not immediately receive a response.
Kwon and five other people have been charged with offenses, including breaking the capital markets law, by South Korean authorities. Kwon earlier this year relocated from South Korea to Singapore, where his now-defunct Terraform Labs project had a presence. However, it is unclear where he is now after the city-state announced on September 17 that he has left. The search for him was subsequently intensified by the prosecution.
The algorithmic stablecoin TerraUSD and its sibling token Luna were created by Terraform Labs. In May, both coins crashed, causing enormous losses in the cryptocurrency markets, which were already in trouble due to tightening monetary policies.
Regulators around the world are studying the disaster to figure out how to prevent a repeat as digital assets have not yet recovered. An initial enthusiasm for cryptocurrency in South Korea is being replaced by a rising disdain.
Three Arrows Capital, a top cryptocurrency hedge firm in the past, came to an end as a result of Terra’s failure and the general market crash. Lenders and brokers including Celsius Network Ltd. and Voyager Digital Ltd. were also affected by the contagion.
The purpose of TerraUSD, often known as UST, was to maintain a $1 value constant in a complicated setup incorporating Luna. However, the system relies on trust in the ecosystem developed by Kwon, a 31-year-old Stanford-trained computer scientist. The agreement failed when the trust was lost.
Kwon‘s arrest order was issued, according to South Korean authorities, in part due to “circumstantial evidence of escape” ever since he left for Singapore. They disputed his assertion that he was cooperating as well.
Kwon has commented on Twitter previously: “We are in the process of defending ourselves in multiple jurisdictions — we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months.”
After TerraUSD failed, the Terra community fell apart. The initial tokens were renamed TerraClassic USD and TerraLuna Classic. Kwon launched a new Terra blockchain at the same time, using a new Luna as its sole coin.
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