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To Kwon, creator of LUNA, UST and Anchor with an arrest warrant

To Kwon, creator of LUNA, UST and Anchor with an arrest warrant

created Michał Sielski14 Września 2022

South Korean Court has just issued an arrest warrant for the CEO of Terraform Labs To Kwon. Police have also received arrest warrants for two other high-ranking Terraform Labs employees based in Singapore. This is the result of an investigation that began four months after the spectacular collapse of the Terra ecosystem and its stablecoin.

The first news was a South Korean newspaper Chosun Ilbo. This is a big surprise, because until recently it seemed that Do Kwon would be considered only a failed entrepreneur and mad visionary, and not a criminal who benefited from a project that was based on false foundations. 

Top prosecutors screen Luna

A month ago, Do Kwon even gave an interview in which he claimed that the South Korean investigators investigating the Terra crash had not even tried to contact him. He downplayed and tried to joke reports that all transactions, documents, and even Terraform Labs connections with cryptocurrency exchanges. And of course he kept repeating that he didn't have much to complain about, everything could be rebuilt. However, investigators had apparently found sufficient evidence to make them laugh last. 

The order was issued by the Seoul County Prosecutor's Office Joint Investigation Team on Securities Fraud, headed by Director Dan Sung-han, and the 2nd Financial Investigation Division, headed by Attorney General Chae Hee-man. The investigation is conducted by the best and most experienced South Korean prosecutors and experts. 

To Kwon arrest after the disappearance of $ 40 billion

The Do Kwona arrest warrant was issued four months after the collapse of the Terra ecosystem along with the Luna and algorithmic token with stablecoin TerraUSD (UST). It is estimated that about $ 40 billion disappeared from the market along with the practically zeroed valuations of these cryptocurrencies.

The basis for the arrest is an accusation of violation of the Capital Markets Act. The same article issued a warrant for the arrest of not only the CEO of Terraform Labs Do Kwona, but also of his two closest associates in Singapore: Nicholas Platias, co-founder of Terraform Labs, and Han Mo from the management team. 

The arrest warrant for all three has already been submitted to Interpol. If any of them wanted to go into hiding, they would be prosecuted by an international arrest warrant. 

Fall of Luna, TerraUSD and Anchor

TerraUSD (UST) was even the third largest stablecoin in the world this year. In mid-May, however, a tragedy began for its owners. The algorithmic stablecoin began to move dynamically away from the 1: 1 parity with USD. TerraForm Labs representatives made a mad attempt to restore parity. To that end, their associated Luna Foundation Guard has been sold billions of dollars in Bitcoinach (BTC) while issuing additional Luna tokens, which in the ecosystem with Anchor were to be a security for the stablecoin. 

However, it did not help, and the prices of Luna and UST hit the bottom. The unit value of both tokens has dropped to almost zero. Investors lost virtually all of their money. 

Then Do Kwon announced a reconstruction plan, which was based on the issue of another cryptocurrency. Luna and Luna Classic were to be a new beginning. However, everything indicates that their creator will direct the new project from behind the prison bars at best. Unless, of course, it turns out that he has suddenly disappeared and no one has contact with him.

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About the Author
Michał Sielski
Professional journalist for over 20 years. He worked, among others, in Gazeta Wyborcza, recently associated with the largest regional portal - He has been present on the financial market for 18 years, he started on the Warsaw Stock Exchange when the shares of PKN Orlen and TP SA were just being introduced to the market. Recently, his investment focus has been exclusively on the Forex market. Privately, he is a parachutist, a lover of Polish mountains and a Polish karate champion.