While in South Korea, the court has just issued a warrant for the arrest of Do Kwon, the creator of the Terra-Luna project and the UST stablecoin, the search continues to find him, and according to South Korean police, he is not currently in Singapore. According to Reuters reports, Do Kwon’s last known whereabouts were in Singapore.
Following his arrest warrant, the South Korean government had asked the country’s Foreign Ministry to cancel his passport so that it would not be possible for him to travel. Nevertheless, it appears that he was able to leave Singapore.
Kwon is strangely still active on social media and tweeted a few days ago saying:
“I am not ‘on the run’ or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide.”
I am not “on the run” or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide
— Do Kwon 🌕 (@stablekwon) September 17, 2022
What happened to Terra and Luna
Last May, the Terra-Luna project and the UST stablecoin failed. When this crash began, apparently due to too many coins being issued in the market, the UST stablecoin lost its peg with the dollar, slipping below $0.01.
This immediately translated into a failure of the entire Terra ecosystem, whose Total Value Locked (TVL) dropped from $17 billion to about $2 million today.
Do Kwon, the project’s founder, first began initiating recovery plans, but then abandoned the project and local authorities began investigating the company, which is now also allegedly accused of money laundering as much as $4.8 million.
Do Kwon vs the SEC
In October 2021, Terra’s founder had sued the US Securities and Exchange Commission (SEC) in response to a series of appearance warrants the SEC had sent him.
The lawsuit that had alarmed the SEC concerned Terra’s DeFi Mirror Protocol, which allowed the issuance and interchange of synthetic shares reflecting the price of the underlying, major US publicly traded companies.
The consequences for the crypto market
The failure of the ecosystem had major repercussions on the entire crypto sector, which began to fall in a major way, and there was a discrediting of the entire crypto market, with decreasing confidence in cryptocurrencies and a feeling of the need for more government regulation.
Even the white hacker group Anonymous released a video explaining that it was investigating Do Kwon.