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Interpol issues red notice for Terraform founder Do Kwon

Interpol has issued a red notice for Do Kwon, requesting law enforcement agencies worldwide to locate and arrest the Terraform Labs founder whose blockchain startup collapsed earlier this year and wiped out investors’ $40 billion.

Kwon faces charges in South Korea for the wipeout of investors’ money, the prosectors said.

The notice against Kwon may set a wrong precedence for the crypto industry and hurt innovation, especially if Kwon didn’t willingly defraud investors and customers, several industry executives have said in recent weeks.

South Korean prosecutors have doubled down on their probe into Kwon in recent weeks, accusing earlier this month that the entrepreneur was “not cooperating,” and was “obviously on the run,” a day after Kwon indicated otherwise. They requested Interpol, a global police organisation, to issue a red notice for Kwon earlier this month.

Terraform Labs’ so-called stablecoin UST and cryptocurrency LUNA dramatically imploded in May after investors lost faith in the efficacy of its fundamentals. Major crypto exchanges including Binance and Coinbase delisted the token and discontinued several of its trading pairs. (Many exchanges have since revived limited support for the old token.)

Kwon, with approval from the Terraform community, has revived the crypto project, but this time has avoided operating a so-called algorithmic stablecoin. The depegging of TerraUSD (UST), the firm’s previous stablecoin, prompted the crash of LUNA token as they were intertwined.

The crash of LUNA token also contributed to the wipeout of Three Arrows Capital, once a high-profile crypto hedge fund. The demise of the fund also severely impacted a number of crypto lenders from whom it had borrowed billions of dollars.

South Korea issued an arrest warrant for Kwon last week, a move that saw many investors sell their positions in revived Luna token. “We are in the process of defending ourselves in multiple jurisdictions — we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months,” Kwon said in a tweet over the weekend.

In an interview with Coinage last month, Kwon said he hadn’t been in contact with South Korean authorities. After the two coins — Luna and TerraUSD — crashed earlier this year, which wiped out about $40 billion of hundreds of thousands of investors’ money, the investors in South Korea and the U.S. filed lawsuits against Kwon over illegal fundraising and fraud.

South Korean prosecutors have accused Kwon of financial fraud. Terraform Labs and the prosecutor’s office could not immediately be reached for comment.

source: TechCrunch