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The Korean Ministry of Finance announced that it is working on voiding the passport of Terra co-founder Do Kwon along with five other members connected to the now-defunct crypto project, according to Korean news source Munhwa Ilbo.
The director of the Seoul Southern District Prosecutor’s Office for Financial and Securities Crimes, Dan Sung-han, asked the finance ministry to expedite the search by voiding their passports.
An official from the Ministry of Finance said that “among the six arrest warrants issued, applications for invalidation of passports have been received for five persons excluding foreigners. All of them have left for Singapore.”
When the passport is voided, Do Kwon and the five other culprits must surrender their passports in their location, which is reportedly in Singapore, and return home.
This request comes right after Do Kwon and others were charged with violating the capital markets act and were issued an arrest warrant.
Kwon was also asked repeatedly to surrender himself but failed to do so, prompting the prosecutors to search for other options, according to Munhwa Ilbo.
This isn’t the crypto founder’s first run-in with the law either.
In June, Kwon was charged with a class-action lawsuit in the United States District Courts of Southern California for selling “unregistered securities” and misleading the public on the actual value of the project’s TerraUSD (UST) stablecoin and governance token Luna (LUNA).
A month later, Korean officials raided the house of co-founder Daniel Shin in Seoul as part of an investigation into Terra’s collapse.
What happened to Terra?
Terra launched in 2020 that serviced an algorithmic stablecoin, TerraUSD (UST). It offered a high-interest savings account via another project called Anchor Protocol, offering investors up to 20% for simple deposits.
The protocol had a unique mint-and-burn mechanism between LUNA and the UST stablecoin. Each time 1 UST was minted, $1 worth of LUNA was burned (and vice versa). This mechanism came under extreme strain during the market’s extreme volatility in May 2022, with LUNA and UST collapsing as investors scrambled for the exit.
With over $40 billion in investors’ money wiped out, South Korea’s pro-crypto President Yoon Suk-yeol relaunched “Yeouido Grim Reapers,” an infamous financial crimes unit, to further investigate the project’s implosion.