Following an ongoing investigation into the collapse of the Terra ecosystem, a court in Seoul issued an arrest warrant for Do Kwon, the CEO, and founder of TerraForm Labs, according to a Bloomberg report Wednesday.
The warrant was reportedly issued in relation to a violation of capital market rules and targets five more individuals who are currently residing in Singapore.
Terraform Labs’ algorithmic stablecoin UST and its sister token LUNA imploded dramatically in May this year, resulting in the wipeout of at least $40 billion of investors' wealth.
Terra Crashed Spectacularly. Here's How It Launched.
TerraForm Labs spent four years building its ecosystem and connecting it to other blockchains before things began to unravel earlier this month. When the TerraUSD algorithmic stablecoin (UST) lost its peg, millions of dollars were wiped out in a matter of days. The coin, which used to carry a redeemable-for-a-dollar guarantee, has been trading for just a nickel. And LUNA, its governance token, which last month had a market cap of more than $30 billion, has seen that metric slip to $680 million....
The collapse of the Terra ecosystem also had a massive impact on the broader crypto market as the price of Bitcoin plummeted from $40,000 at the beginning of May to $27,000 a mere two fortnights later.
The ensuing crypto rout also saw several high-profile cryptocurrency lending firms and brokers, including Celsius, Three Arrows Capital (3AC), and Voyager Digital, go bankrupt, bringing the market further down.
Bitcoin is trading at $20,222 at press time on Wednesday, down 9.22% over the past 24 hours, per CoinMarketCap.
Terra investigated globally
In July, South Korean prosecutors raided the home of Terraform Labs co-founder Daniel Shin as part of a probe into allegations of illegal activity behind Terra’s collapse.
Authorities also said that Kwon needs to notify them when he returns to the country.
A class-action lawsuit was also brought against Kwon and Terraform Labs in June in the U.S. District Court in Northern California.
South Korean Authorities Widen Terra Probe as Co-Founder Daniel Shin's Home Raided
A probe into possible illegal activity behind the algorithmic stablecoin TerraUSD (UST) and the affiliated LUNA token has deepened with a raid on the Seoul home of the firm’s co-founder Daniel Shin, according to a Bloomberg report citing local media. Investigators also reportedly visited the office of the mobile payment app Chai, which was founded by Shin in 2019. Chai has been marketed as the first mobile payments app to utilize the Terra blockchain to enable anyone with a bank account to make...
Despite the widespread investigation of the Terra collapse, Kwon denied allegations that the project was a “fraud.” He also claimed that he had personally lost nearly all his net worth in Terra’s crash.
In an interview last month, Kwon said that South Korean prosecutors hadn’t been in contact with him and he hasn’t been charged with anything.
