Interpol issues red notice for Terraform founder Do Kwon • TechCrunch

Interpol issued a red notice for Do Kwon, asking law enforcement around the world to locate and arrest the founder of Terraform Labs whose blockchain startup collapsed earlier this year and wiped out $40 billion. dollars from investors.

Kwon faces charges in South Korea for disposing of investors’ money, prosecutors said.

The opinion against Kwon, which a spokesperson for South Korean prosecutors confirmed to TechCrunch, could set a bad precedent for the crypto industry and harm innovation, especially if Kwon did not knowingly defraud investors and customers, several industry executives have said in recent weeks. .

“Having met Do Kwon… leaving aside his human nature… I think the criminalization of Terra is a dangerous precedent,” said Haseeb Qureshi, managing partner at crypto investment fund Dragonfly, in a recent podcast. Qureshi, however, warned that he, like many others, does not know all the details.

South Korean prosecutors have doubled down on their investigation of Kwon in recent weeks, charging earlier this month that the contractor was “not cooperating” and was “obviously on the run”, a day after Kwon indicated otherwise. They asked Interpol, the global police organization, to issue a red notice for Kwon earlier this month.

So-called UST stablecoin and Terraform Labs cryptocurrency LUNA dramatically imploded in May after investors lost faith in the effectiveness of its fundamentals. Kwon, with the approval of the Terraform community, has revived the crypto project but has avoided the stablecoin algorithmic component for now. The depegging of TerraUSD (UST), the firm’s former stablecoin, caused the LUNA token to crash as they were intertwined.

The LUNA token crash also contributed to the wipeout of Three Arrows Capital, once a top crypto hedge fund. The fund’s demise severely affected a number of crypto lenders, including BlockFi from whom it had borrowed billions of dollars.

South Korea issued an arrest warrant for Kwon earlier this month, a move that saw many investors sell their positions in the revived Luna token. “We are 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 coming months,” Kwon said in a tweet this month.

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