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South Korea issues arrest warrant for Do Kwon, Luna drop nearly 50%

·1-min read

A court in South Korea has issued an arrest warrant for Do Kwon, the founder of Terraform Labs, escalating its probe into the crypto ecosystem whose two tokens lost $40 billion in value in a span of days earlier this year.

LUNA, the new token of the revived ecosystem, dropped as high as 48.4% to $2.23 apiece on the news, which was earlier reported by local media Yonhap, before recovering slightly. The South Korean court has issued arrest warrants for six people, the news outlet reported, adding that the prosecutors believe the individuals have violated the nation's capital market rules.

Terraform Labs' so-called stablecoin UST and cryptocurrency LUNA dramatically imploded in May after investors lost faith in the efficacy of its fundamentals. Major crypto exchanges including Binance and Coinbase delisted the token and discontinued several of its trading pairs. (Many exchanges have since revived limited support for the old token.)

Kwon said in an interview to Coinage last month that South Korean prosecutors hadn’t been in contact with him and he hasn’t been charged with anything — even though law enforcement is barring his employees from leaving the country.

“It’s kind of hard to make that decision, because we’ve never been in touch with the investigators. They’ve never charged us with anything.” Kwon said in the video interview.

South Korean prosecutors raided the home of Terraform Labs co-founder Daniel Shin in July as part of a probe into allegations of illegal activity behind Terra’s collapse. Authorities had also said that Kwon needs to notify them when he returns to the country.