According to the financial crimes division of the Supreme Prosecutors’ Office, a court in South Korea has ordered an arrest order against Do Kwon, Chief Executive Officer and co-founder of Terraform Labs. A warrant was issued by the Seoul court for Do Kwon and five other people. The Capital Markets Act is alleged to have been broken by them.
How come the warrant was issued?
Following the stunning failure of the Terra project earlier this year, an investigation into the creator of the platform which is known as Terraform Labs, the organization behind the algorithmic stablecoin UST, is intensified. UST and its sister cryptocurrency Luna suffered combined losses of almost $60 billion as a result of the collapse of the Terra platform in the month of May, along with its algorithmic stablecoin, crashed and burned, becoming the first domino in this year’s crypto winter.
When Terra USD, also known as UST, collapsed off its dollar peg and toppled the ecosystem he had established, he found himself in the epicentre of one of cryptocurrency’s largest blowups. The May fall rocked confidence in the digital asset market, which hasn’t fully recovered from its losses.
What happened to UST?
Authorities in South Korea are broadening their investigation into the UST stablecoin, which was at first 1:1 tied to the US dollar. It detached from its goal price in the middle of May, setting off a major sell-off of cryptocurrencies.
Crypto lenders Celsius Network and crypto brokers Voyager Digital declared bankruptcy as a result of the subsequent contagion, which had a devastating effect on the whole industry as the value of digital assets fell by more than 50% from its peak.
How does Kwon respond?
When the time is right, Kwon has declared he will assist. Life is long, Kwon remarked in an interview with the crypto media start-up Coinage when the possibility of going to jail was raised.