What just happened? Do Kwon, founder and CEO of Terraform Labs, the company many blame for starting the crypto winter, has had an arrest warrant issued against him in South Korea and may be forced to return to the country.
Back in May, TerraUSD (UST), an algorithmic stablecoin that was then the 11th largest cryptocurrency by market cap, crashed from its US dollar peg and fell close to zero, bringing support coin Luna with it. Around $60 billion combined was wiped off the value of both tokens. The fall impacted the entire crypto industry, which saw its overall market cap fall below $1 trillion, layoffs and bankruptcies at major companies, and miners abandoning the business.
According to Bloomberg, Kwon and five others, all listed on the warrant as living in the city-state of Singapore, are the subjects of an arrest warrant issued by a South Korean court over charges relating to violating the Capital Markets Act.
Authorities are now trying to force Kwon back to South Korea by seeking to have his passport revoked. If the Foreign Ministry does grant the request, Kwon would theoretically have to return to his home country within 14 days, though the ministry said it’s possible Kwon can stay in Singapore without a passport.
In July, prosecutors raided the home of Terraform Labs co-founder Daniel Shin as part of an investigation into illegal activities behind TerraUSD’s collapse. The Reg notes that current and former Terraform employers have been banned from international travel.
Some Luna investors have filed complaints against Kwon, alleging he engaged in fraud and illegal fundraising. Kwon previously said he plans to co-operate with authorities. “Obviously, like in hindsight, a lot of the beliefs and sort of the conjectures that I had made were wrong,” he said about the collapse.
Kwon created a new version of Luna after the previous one crashed. Its price fell 45% to $2.40 following news of the warrant. It seems he is philosophical about the prospect of going to jail. When asked about such a possibility by Coinage, Kwon said, “Life is long.”