Nowadays, a wanted fugitive is the developer of the failing stable coin that started the crypto winter. A South Korean court handed Do Kwon an arrest warrant. Do Kwon arrested for unlawfully breaking the financial markets law? He was the co-founder of Terraform Labs. Five additional people are listed on the arrest warrant.
Do Kwon latest news
Due to a chain reaction, Kwon’s programmable Stablecoin Terra (UST) caused the cryptocurrency market to tumble in May. UST dropped from its fixed value of $1, which is what it is intended to be valued. With a market valuation of $18 billion, Terra became one of the giant stable coins available. Stablecoins like Terra are favored by many cryptocurrency users above other riskier cryptocurrencies that see substantial price volatility.
Do Kwon was behind failed stablecoin
Despite efforts to bring the Terra price back to $1, the value of UST kept falling. Before this year, the “sister” cryptocurrency to Terra, LUNA, had a value of over $100. However, it soon lost value and is now almost useless at less than a penny for each token. The ripple effects quickly spread throughout the cryptocurrency markets, with these tokens suffering significant losses in the following months. The Terra/Luna crisis will eventually occur in liquidity issues and specific cases, bankruptcy for crypto lending companies like Celsius and crypto institutional investors like Three Arrows Capital.
Since Terra’s failure spread to the following failures of the Celsius bank and Three Arrows Capital hedge fund, it left a trail of billions of dollars in unpaid principal bills. It disrupted the cryptocurrency markets for months. Numerous people started questioning whether Terra-Luna was a Ponzi scam from the beginning when thousands of cryptocurrency investors lost their entire savings in the meltdown. Do Kwon, the South Korean businessman and Stanford alumnus, founded it. He had a brave presence on Twitter and Discord. Frequently trash-talking doubters and skeptics mysteriously went silent before resurfacing days later with a blueprint for a fresh token, Luna 2.0, intended to save the failing system.
What happened after Do Kwon released Luna?
Soon after, Do Kwon rereleased Luna to change course, a move that also failed. The originator of the cryptocurrency frequently tweets and speaks with the crypto press but has remained largely quiet about it. Daniel Shin, the co-founder of Terraform Labs, was the target of an investigation by authorities in July, investigating possible misconduct. Do Kwon is presently in Singapore, as are the other five individuals included in the warrant for arrest search. The Financial Times reports that despite the lack of a bilateral abduction deal between the two nations, authorities are looking for international assistance in their efforts for Do Kwon arrest.
According to a representative for South Korean authorities, a warrant for arrest search has been filed for six people, namely Do Kwon, who is now living in Singapore. After a lengthy investigation, including raids on nearby offices, Do Kwon was arrested along with other 5 people on suspicion of breaking the country’s capital markets law. Employees of Terraform are not permitted to leave the country after a police operation on the house of Kwon’s co-founder Daniel Shin in July.
