An employee of Terra-LUNA who South Korean prosecutors apprehended exemplifies the ancient adage “You can run, but you cannot hide.” Investigations into the collapses of Terra LUNA and UST have spanned months and taken up the better part of 2022. Do Kwon has found the past few weeks extremely difficult to bear.
Do Kwon is an individual who has disrupted the crypto ecosystem and labeled the crypto market “fool’s gold.” The South Korean branch of the legal system has taken all necessary steps to provide Terra investors with a taste of justice. This arrest is a minor success for these investors who have invested their blood and sweat into the LUNA ecosystem.
South Korea makes the first arrest in the Terra case
Prosecutors in South Korea have apprehended one Terraform Labs (TFL) Pte. Ltd. employee and issued a bench order for his arrest. Wednesday, the Seoul Southern District Prosecutor’s Office gave Yoo a bench warrant.
The man known as Yoo is in charge of all general matters on Terra. In addition to other accusations, the warrant was for violations of the Capital Markets Act, fraud, and breach of duty. The district prosecutor, Choi Sung-kook, has confirmed the official details. His only surname, Yoo, was disclosed.
Yoo is one of the TFL associates for whom a local arrest warrant was issued on September 14, alongside TFL’s cofounder and chief Kwon Do-Hyung, or Do Kwon. Yoo reportedly belongs to Kwon’s inner circle at Terra. This is a fascinating fact because if he betrays Do Kwon, the Terra ecosystem will be subjected to swift justice.
On Thursday morning in Korea, the Seoul Southern District Court was working on a “direct judgment of warrant” for Yoo in order to decide whether or not to issue the bench warrant. The decision will be made public within the day.
However, Choi refuses to disclose the actual arrest date and place. Prosecutors allege that Yoo inflated and manipulated the market price of Terra’s cryptocurrency using bot programming. These happenings make the investors furious at the idea that they invested in a fraudulent scheme.
Terra CEO to lose his passport within a month
When it rains, it pours. Do Kwon is more negatively affected by the arrest than the rest of the Terra team on the run. In the meantime, South Korea has revoked Do Kwon’s passport and requested that Interpol issue a “red alert” with the arrest order.
The collapse of Terra’s algorithmic stablecoin and sister cryptocurrency in May of this year precipitated a calamity from which many investors have yet to recover. Investors lost $40 billion due to the collapse and called the crypto market to question.
South Korea has demanded that Do Kwon relinquish his passport or face having it revoked as the East Asian government escalates its proceedings against the crypto entrepreneur. According to the government’s website announcement on Thursday, the South Korean government has given Kwon fourteen days to comply with the latest order.
In response to a request by local prosecutors investigating Terra-LUNA to revoke the passports of six Terra associates, including Kwon, the passports of Kwon and five others have been revoked by the South Korean Foreign Affairs Ministry.
The notification states that Kwon’s ability to renew his passport could be restricted between September 15, 2022, and September 13, 2023.
Kwon’s current location is unclear. However, he keeps his followers informed on his life via Twitter. Following media allegations that South Korean prosecutors had expanded their actions against him, he rejected rumors that his crypto assets had been frozen on Wednesday.
News1 stated that authorities had frozen $39.6 million worth of crypto assets belonging to the founder and CEO of Terraform Labs. In reaction, Kwon referred to the article as a “falsehood” and reiterated that he does not utilize KuCoin and OkEx.
Have no time to trade, no funds have been frozen […] I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.
If Kwon’s passport is returned to the authorities, he will receive a new one after September 13, 2023. If it is not returned within the specified timeframe, Kwon’s passport will be canceled.
Terra-LUNA and LUNC prices drop
In the midst of these advancements, the value of a number of tokens in the Terraform labs ecosystem is declining. Both LUNC and LUNA have declined, with LUNC falling by more than 3% and LUNA down by nearly 2%. In recent months, the Terraform labs as a whole have taken a significant impact due to numerous catastrophes.
FatMan, a Terra Research Forum community member, has presented information that traces LFG’s bitcoin holdings to KuCoin and OKEx. He stated they belonged to either Kwon or those who purchased them from him under the peg defense agreement.
The current events surrounding Terraform Labs and Do Kwon are a spectacle for crypto insiders and outsiders alike. Only time will tell how this matter will be resolved, or if it will be resolved at all. Currently, the arrest feels quite lovely to the investors who have been afflicted.