South Korean authorities issue arrest warrant for Terraform Labs founder Do Kwon

The LUNA token reacted to the news by falling by 40,82%

14.09.2022 - 08:15

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What’s new? A South Korean court has issued an arrest warrant for Terraform Labs (TFL) founder Do Kwon and five other company employees. According to Bloomberg, the court’s decision is based on a violation of the local Capital Markets Act.

News on the Bloomberg website

What else is known about the case against Do Kwon? In late May, the South Korean Prosecutors Office opened an investigation into TFL employees on suspicion that they knew about the possible collapse of the Terra blockchain ecosystem. Main developers were later banned from leaving the country. The local tax authority also reported that TFL was laundering money through a shell company. In June, the US Securities and Exchange Commission (SEC) also opened an investigation into Do Kwon. He is suspected of involvement in the trading of unregistered securities through the Mirror protocol, created on the Terra blockchain. South Korean and US authorities met in July to discuss a parallel investigation into Terra.

At the time of writing, it remains unknown whether Do Kwon will return to South Korea from Singapore, where he left after Terra’s collapse. In May, the TFL founder said in an interview for Coinage Media that South Korean prosecutors had not yet contacted him about the incident.

The news about the issuance of an arrest warrant affected the rate of token of the new Terra (LUNA) network. It lost 40,82% per day and is trading at $2,5421 at the time of writing the news (September 14, 08:00 UTC), according to Binance. The value of the token of the old Terra Classic (LUNC) network is $0,00028416, having decreased by 15,82%.

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