Terra’s downfall is still haunting Do Kwon. The South Korean authorities are stating that Do Kwon is trying to evade a possible investigation.
As UST lost its $1 peg on May 10, Terra’s currency and its algorithmic stablecoin Terra USD experienced a sharp decline. The mechanism was designed to maintain its peg to the US dollar automatically. The UST lost value as a result of its failure, and a record number of LUNA tokens were generated.
The decline was severe, with LUNA’s value falling by 95% in a couple of days. The fall witnessed millions losing their life savings as billions was wiped out of the crypto market.
Is Terra’s Do Kwon on the run?
Kwon had relocated from South Korea to Singapore, the basis of his now-defunct Terraform Labs enterprise, although the city-state claims he has left.
Even though Seoul prosecutors are seeking Kwon’s arrest over claims including breaking capital-markets law, his location is unknown, and he insists that he is not on the run.
Since he left for Singapore, there has been “circumstantial proof of escape,” according to the prosecutors’ office, which is why an arrest order was first issued. Regarding whether the office is aware of Kwon’s location or intends to inform Interpol, it declined to comment.
Despite not publicly disclosing his location, Kwon tweeted days back that he doesn’t “have anything to hide” and is cooperating fully with authorities.
However, according to prosecutors quoted by the Yonhap News Agency, Kwon is not participating in investigations and has informed investigators via an attorney that he has no plans to appear up for interrogation. In addition to this, South Korean authorities urged Interpol to issue a “red notice” against Kwon.
Kwon, along with five others, is facing arrest in South Korea in connection with the Terra affair. Officials might revoke his passport, requiring him to return to Seoul within 14 days after receiving the notification of suspension.
After a string of failures, notably Terra, the Three Arrows Capital hedge fund, and cryptocurrency lender Celsius, crypto firms also realize the necessity for much tighter risk management.
The regulators are also strengthening the measures to ensure that an incident similar to that of Terra will never happen again.