As reported by Bloomberg, Do Kwon, Terra’s co-founder, and five others have been served an arrest warrant following UST’s crash in May of 2022. According to a text message from the prosecutor’s office in Seoul, the arrest is based on allegations that include violations of the nation’s capital markets law. Neither Do Kwon nor South Korea’s Supreme Prosecutors’ Office has issued a statement at the time of writing. Following the news, LUNA’s price has decreased by 45% to $2.40. Additionally, the market cap has fallen 42% to $413.2 million.
Terraform Labs, which hosts Terra (LUNA) and algorithmic stablecoin TerraUSD (UST), was in the news earlier this year when both cryptocurrencies collapsed. The crash led to combined losses of roughly $60 billion between UST and its sister cryptocurrency, LUNA. Following the crash of UST, the crypto market suffered massive losses as a whole with the market decreasing by $2 trillion from May to June.After the crash, Do Kwon pushed for the creation of a new version of the LUNA coin.
Terra’s implosion sparked legal investigations into the company and its founders in South Korea and the U.S. Several people voiced concerns about stablecoins, which have fixed values backed with assets like dollars and gold.
This is not the first time Terra and its co-founders have been in the crosshairs of the authorities. Earlier in June, an unnamed official at South Korea’s Supreme Prosecutors’ Office announced that several Terraform Labs employees could not leave the country and had been placed on a no-fly list. Furthermore, prosecutors raided Terraform Labs co-founder Daniel Shin’s home in July as part of the investigations.
All six individuals with latest arrest warrants are currently located in Singapore.