Interpol issued an international search and arrest warrant for Do Kwon, the founder linked to the fall of a major South Korean crypto project. The move followed reports that the cofounder of Terraform Labs, the company behind the Luna and Terra tokens, may be avoiding authorities. The announcement came from the Southern District Attorney’s Office in Seoul on a recent Monday, highlighting the seriousness of the charges and the global reach of the investigation.
In early May, Luna ranked among the ten most valuable cryptocurrencies worldwide. Within days, its value collapsed dramatically, wiping out about $60 billion in a short period and leaving thousands of investors counting the cost. The dramatic drop underscored how quickly sentiment in the crypto market can turn and how interconnected the fortunes of many tokens are with broader market dynamics.
South Korean authorities charged Do Kwon, a 31-year-old engineer, along with five other Terraform Labs executives, accusing them of multiple offenses tied to violations of national financial laws. The case has drawn intense scrutiny from regulators and the crypto community alike as officials pursue accountability amid a sector known for rapid innovation and risk.
unknown location
Last week, prosecutors issued a custody order for the founders involved in the crypto assets, but locating them proved challenging. Authorities requested international assistance from police agencies worldwide as they tried to track down the fugitive. At one point, it was believed that Kwon had been residing in Singapore since the start of the year, though his current whereabouts remain unclear. Officials in South Korea say there is indirect evidence that supports the need for an Interpol red notice, which urges police globally to locate and arrest a suspect if they enter their jurisdiction, potentially enabling extradition.
Kwon responded to the allegations by denying the most serious claims. He stated that he is not a fugitive and suggested that he and his team are cooperating with any interested government body, asserting they have nothing to hide and remain open to inquiries.
Crypto market crash
Terra, also known as UST, was designed as an algorithmic stablecoin intended to maintain a fixed dollar value by balancing supply and demand. When the mechanism failed to sustain the peg, confidence in the ecosystem eroded, accelerating the market downturn. Efforts by Do Kwon to stabilize prices did not prevent the broader decline, contributing to the downward pressure on leading assets like Bitcoin and weakening the overall crypto sentiment.
The collapse drew attention to the risk profile of Terra and related projects, highlighting how ambitious financial engineering can expose investors to substantial losses. The broader crypto market has not fully recovered since the events last May, with regulators around the world warning about exposure to risky schemes and the potential for market-wide disruptions. The episode sparked discussions about risk controls, governance, and the need for more transparent disclosures within crypto ventures. Analysts note that the fallout extended beyond a single project, affecting credibility and funding across multiple platforms and lenders in the sector.