Terra Co-Founder Do Kwon is currently facing the heat of law and legal proceedings. South Korean Court has issued an arrest warrant for Do Kwon, who is the founder of Terraform Labs cryptocurrency system, and five others following allegations of violation of the nation’s capital markets law.
A text message has been forwarded from the prosecutor’s office to Do Kwon and five others. All six individuals are situated in Singapore. The prosecutor’s office further reported that Do Kwon has not replied yet.
Already in July 2022, prosecutors had raided the home of Terraform Labs Co-Founder Daniel Shin as the probe into allegations of illegal activity behind the collapse of TerraUSD intensified. In May 2022, Do Kwon was at the center of one of the most devastating market crashes in crypto history, leading to losses of millions of assets from investors of TerraUSD (UST) which is now renamed as TerraUSD Classic (USTC) and Terra (LUNA), which is also rebranded to Luna Classic (LUNC).
The UST stablecoin started to drift away from its United States dollar mark hitting rock bottom of $0.006 in June. This crypto market collapse in May shook the faith in the digital-asset sector and has yet to recover much of the losses.
Do Kwon’s followers, popularly referred to as “Lunatics” named after Luna, another token that was part of the ecosystem which he assisted in creation also suffered the same fate. The prices of both tokens swooped down to near zero which once had a combined value of $60 billion.
After this market catastrophe Do Kwon went on to create a new version of Luna. The price of this new token fell as much as 45% to $2.40 following news of the arrest warrant, according to CoinGecko data. The coin’s market cap fell from 42% to $413.2 million.