Do Kwon, the cryptocurrency founder whose Luna currencies and stablecoin TerraUSD led to a $300 billion collapse of the cryptocurrency, is now wanted by Interpol following arrest warrants issued earlier this month.
Last week, South Korean authorities issued warrants against Kwon and five others on September 14, alleging that their work on Terraform Labs’ crypto products violated the country’s trade laws. At the time, all six were believed to be in Singapore. According to media reports, the Singapore Police Force believes that Kwon is no more. Recently, Interpol issued a “red notice”calling on law enforcement agencies around the world to find and detain Kwon.
Kwon tweeted three days after the South Korean warrant that he “wasn’t ‘on the run’ or anything”and that he was “fully cooperating and we have nothing to hide.”But he hasn’t tweeted in over a week since.
The next day, South Korean prosecutors said Kwon was “obviously on the run”and not cooperating with their investigation. Prosecutors told the South Korean Yonhap news agency that Kwon’s lawyer told prosecutors that Do Kwon would not show up for questioning. Kwon and Terraform Labs are also under investigation by the US Securities and Exchange Commission.
We are in the process of defending ourselves in multiple jurisdictions – we hold ourselves to an extremely high bar of integrity and look forward to clarifying the truth over the next few months.
Do Kwon’s firm Terraform Labs has raised over $200 million from well-known investment firms to build projects based on Luna, a cryptocurrency, and TerraUSD, an “algorithmic stablecoin”pegged to the value of the US dollar. Instead of holding reserves of cash, bonds, or other assets, TerraUSD automatically traded Luna to maintain its peg.
At the start of 2021, Luna’s price skyrocketed to $116. Kwon ultimately purchased $3.5 billion worth of bitcoin to be held by the Luna Foundation Guard, a non-profit organization dedicated to protecting Luna and TerraUSD from market volatility.
It didn’t work. In early May, Terra’s price dropped to a few cents during a quick sell-off, while Luna dropped from $80 to less than 2 cents. The Luna Foundation Guard sold and distributed almost all of its 80,000 bitcoins, saving just over 300 to compensate investors. The organization has denied claims that it bailed out Luna’s biggest whale investors with coins, although it has never provided proof of this.
The near-total collapse of the approximately $40 billion Luna/Terra ecosystem in early May 2022 triggered a wider sell-off and a $300 billion cryptocurrency divestiture, although this has already begun quietly.
Kwon has become known as an arrogant and aggressive figure on crypto twitter and decentralized finance circles. He named his first daughter Luna after his coin. He often ridiculed and shrugged off critics as “poor people”, including a British economist who questioned Terra’s stability during the sell-off. After the crash, Kwon publicly announced plans to relaunch Terra as Terra 2.0.
Earlier this month, another Kwon-related crypto coin was launched: “JailKwon,” a meme coin that claims it will use the proceeds for crypto security education and market analysis. The day the warrant for Kwon’s arrest was issued, the company’s capitalization rose to an all-time high of over $300,000.