November 27, 2022

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Interpol issues arrest warrant for founder of Terra cryptocurrency – IT Pro – News

Interpol has issued an arrest warrant for Do Kwon, co-founder of cryptocurrency startup Terraform Labs. This happened at the request of the South Korean authorities. Do Kwon has been blamed for the crash of the Terra and Luna stablecoins.

Do Kwon, along with five others, were alleged to have committed violations of capital market laws, He writes for Bloomberg News. It is unclear what exactly these violations consist of. Do Kwon previously moved from South Korea to Singapore, where Terraform Labs is based, but is currently untraceable. South Korean prosecutors have issued an arrest warrant for Do Kwon, in part due to “indirect evidence of escape”. Nor will he cooperate though his own claim about it.

Terraform Labs is the company behind it stablecoins TerraUSD and Luna. Terra, in combination with Luna, was intended to maintain a constant value of the dollar. If the Terra price drops, Luna can be purchased to boost it again. The condition for this was that Luna’s value must remain high enough to be able to accommodate Terra’s value fluctuations. Luna’s value has fallen a lot further tera drop So it can no longer be accommodated.

In such a case, the company had more than 80 thousand bitcoins in reserve. Do Kwon promised to invest all these bitcoins in an effort to increase Terra’s value. I kept that promiseBut the desired effect was not achieved.

The value of both cryptocurrencies dropped significantly in May. They have taken a large portion of the cryptocurrency market with them. At the time, he was also annoyed by the tightening of monetary policy. The combined market capitalization of all cryptocurrencies has fallen from $3 trillion to $1 trillion since the crash. Hedge fund Crypto Three Arrows Capital and lenders and traders such as Voyager Digital and Celsius Network have not recovered. After the crash, the original tokens were renamed Terra Luna Classic and TerraClassicUSD. Do Kwon has introduced a new Terra blockchain with Luna as the only token.

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