South Korean Court Issues Arrest Warrant Against Terra Co-Creator Do Kwon

An arrest Warrant has been issued against Do Kwon, the co-founder of Terraform Labs, which created the cryptocurrencies Terra Classic USD and Tera Luna (LUNA)

A South Korean court has issued an arrest warrant against Do Kwon, the founder of Terraform Labs, which created the cryptocurrencies Terra Classic USD and Terra Luna, on charges of violating the country’s Capital Markets Act, Bloomberg reported.

The probe comes after Terra Classic USD and Terra Luna (LUNA) lost more than 88 per cent of their value in May in a matter of few days.

In the last 24 hours to Wednesday evening, Terra Luna and Terra Classic USD fell around 35 per cent and 21 per cent, respectively.

The authorities are also probing if they can categorise TerraUSD as security.

In July, prosecutors had searched the home of Terraform Labs co-founder Daniel Shin.

Meanwhile, investigators placed “a notification upon arrival” on Kwon, meaning they will be notified when he enters South Korea.

South Korean authorities are expanding their probe into the UST stablecoin, initially pegged to the US dollar in a 1:1 ratio. It decoupled from its target price in mid-May, triggering a massive cryptocurrency sell-off. The market is yet to recover.

Kwon told the crypto data aggregator Coinage that South Korean authorities have not yet contacted him and that he had not been indicted. However, the investors have barred his staff from leaving the country.