South Korean court, co-founder of Terra ecosystem Do KwonHe accused of violating capital market rules and issued an arrest warrant.
According to a Bloomberg report published Wednesday, terra Following an ongoing investigation into the collapse of its ecosystem, a court in Seoul has issued an arrest warrant for TerraForm Labs’ CEO and founder, Do Kwon.
It was also included in the report that the arrest warrant was issued in connection with the violation of capital market rules and covers five more people currently residing in Singapore.
Terraform Labs‘s algorithmic stablecoin UST and governance token LUNA plunged drastically in May this year, wiping out at least $40 billion in investor assets.
The collapse of the Terra ecosystem also created a staggering impact and panic on the wider crypto market as the price of Bitcoin dropped from $40,000 at the beginning of May to $27,000 just two weeks later.
Things got even more complicated when several high-profile crypto lenders and brokers went bankrupt, including Celsius, Three Arrows Capital (3AC) and Voyager Digital, which suffered domino effects following Terra’s collapse.
Terra Globally Investigated
South Korean prosecutors raided the home of Terraform Labs co-founder Daniel Shin in July as part of an investigation into allegations of illegal activity behind Terra’s collapse.
Authorities also emphasized that Kwon should inform them when he returns to the country. A class action lawsuit was also filed against Kwon and Terraform Labs in U.S. District Court in Northern California in June.
Despite widespread investigation into the Terra collapse, Kwon denied allegations that the project was a “fraud.” He also claimed that he personally lost almost all of his net worth in Terra’s accident.
In an interview last month, Kwon claimed that South Korean prosecutors had not contacted him and that he had not been charged with anything.
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