Following an ongoing investigation into the collapse of the Terra ecosystem, a court in Seoul issued an arrest warrant for Do Kwon, CEO and founder of TerraForm Labs. According to a new report, the warrant was issued in connection with an alleged violation of capital markets regulations and targets five more individuals who are currently residing in Singapore. Terraform Labs’ algorithmic stablecoin UST and its partner token Luna exploded dramatically in May this year, resulting in the liquidation of at least $40 billion (about Rs 3,18,776 crore) of investors’ assets.
as one report per By Bloomberg, a court had issued arrest warrants for the Terra founder and five other individuals. The warrant alleged that Kwon and his associates violated Korean capital markets law, according to the report, citing a text message from the prosecutor’s office.
After briefly becoming the fifth-largest cryptocurrency by market cap, the blockchain ecosystem faltered in May when investors lost faith in the dollar peg of the network’s UST stablecoin. Since UST was not backed by the real dollar and was instead valued through an algorithmic relationship with LUNA, the loss of confidence resulted in a death spiral that sent the price of LUNA and UST down to fractions of a penny. Gave.
The collapse of Terra triggered an investigation by the US Securities and Exchange Commission (SEC), Korean regulators as well as several class-action lawsuits.
In July, South Korean officials raided At least seven cryptocurrency exchanges in connection with the Terraform Labs investigation. Several lawsuits also claim that Kwon and his company defrauded investors and accused the firm of operating a Ponzi scheme.
Terra 2.0, the blockchain that was launched by Kwon’s company Terraform Labs after the collapse of the original Terra blockchain, has been hit hard in response to news that an arrest warrant was issued. native to the network luna token It has fallen by more than 36 percent in the last 24 hours.