Story with the algorithmic stablecoin TerraUSD (UST) and its sister token Luna received an unexpected continuation. South Korea said Interpol has asked law enforcement agencies around the world to find and arrest Terraform Labs co-founder Do Kwon. He was charged with destroying $60 billion worth of cryptocurrencies he had created, reports Bloomberg.
South Korean authorities charged Kwon and five other people with crimes, including violations of the capital markets law. Earlier this year, Kwon moved from South Korea to Singapore, where his project Terraform Labs used to be based. On September 17, the city-state announced that he was no longer there, so Kwon’s whereabouts are now unknown. Subsequently, prosecutors intensified efforts to search for him.
Terraform Labs was behind the algorithmic stablecoin TerraUSD and its sister token Luna. Both coins collapsed in May and provoked huge losses in cryptocurrency markets, which were already suffering from the tightening of monetary policy.
Terraform Labs’ collapse and the broader market decline led to the collapse of Three Arrows Capital, a once-powerful cryptocurrency hedge fund. TerraUSD was supposed to maintain a constant value of $1 in a complex scheme involving Luna, but the system depended on trust in the ecosystem created by the 31-year-old Kwon. As soon as the trust disappeared, the value of the cryptocurrency collapsed virtually to zero.
South Korean prosecutors said they issued the warrant for Kwon’s arrest in part because there was “circumstantial evidence that he had fled” since he left for Singapore. They also questioned his statement that he was ready to cooperate with the investigation.