South Korea Seeks The Arrest Of Terraform Labs Founder Do Kwon
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According to a text message from the prosecutor's office, Do Kwon and five other people are wanted by the Seoul court on suspicion of breaking the country's capital markets law. The warrant was issued a few months after the collapse of the Terra ecosystem and its stablecoin (UST), which had a significant impact on the cryptocurrency markets. The tumble has prompted numerous nations, including prominent cryptocurrency hedge fund Three Arrows Capital (3AC), to examine stablecoin regulations and bankruptcy.
Do Kwon's Appearance After Terra Collapse
The founder of Terra, Do Kwon, gave his first interview last month after his cryptocurrency project saw a stunning fall in May that caused many people to lose their life savings and confidence in so-called stablecoins.
"I've never thought about what could happen to me if this fails," the Terraform Labs CEO said in an interview on the NFTV series Coinage with host Zack Guzman.
In the interview, he acknowledged that his confidence now "looks crazy."
The Terraform Labs-developed token UST is an algorithmic stablecoin. It employs a sophisticated combination of code and Luna to stabilize the process rather than holding cash and other assets in reserve to back its token. In the highly turbulent cryptocurrency market, stablecoins are a reasonably safe sanctuary. The drama demonstrated that algorithmic stablecoins, a complex and subpar form of banking reserve, are equally as volatile as other cryptocurrencies.
Because the initial investors were among the hardest hit by the crash, he claimed that Terra was not a Ponzi scheme. Kwon claimed he was "down infinite" and could not put a number on his losses. Kwon argued against the idea that Terra might have a mole.