South Korean Authorities Request Interpol Red Notice For Terra’s Do Kwon

South Korean prosecutors have requested that Interpol issue a red notice against Do Kwon, the co-founder of the collapsed Terra ecosystem.

According to a report in the Financial Times, the Seoul Southern District Prosecutor’s Office has “begun the procedure to place [Kwon] on the Interpol red notice list and revoke his passport.” 

Interpol red notices are issued for fugitives wanted either for prosecution or to serve a sentence; Kwon has yet to appear on the Interpol red notice site. 

Last week, South Korean prosecutors issued an arrest warrant against Kwon, accusing him of violating capital market rules; they also asked the finance ministry to void his passport. At the time, Kwon was believed to be resident in Singapore; police in Singapore subsequently confirmed that the Terra co-founder is no longer in the country.

On Saturday, Do Kwon himself tweeted that, “I am not ‘on the run’ or anything similar,” adding that, “for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide.”

The collapse of Terra

Launched in 2020, the Terra blockchain ecosystem was built around the algorithmic stablecoin TerraUSD (UST) and its sister coin, LUNA.

In May 2022, the UST stablecoin lost its dollar peg and never recovered, causing both LUNA and Terra to enter a death spiral that wiped out billions of dollars in value in less than a week.

Following Terra’s collapse, law enforcement agencies and regulators began investigations into Terraform Labs, the company behind all things Terra, and its co-founder, Do Kwon.

In June, a class action lawsuit was brought against Do Kwon and Terraform Labs in the U.S District Court of North California, while the SEC revealed that it was investigating the collapse of UST.

A month later, South Korean prosecutors raided the house of Daniel Shin, another co-founder of Terraform Labs, as a part of the probe.

South Korean president Yoon Suk-yeol has relaunched a financial crimes unit to investigate the collapse of the Terra ecosystem further.

Do Kwon has denied allegations that Terra was a “fraud,” and has claimed that he lost almost his entire net worth in the crash.