Following an ongoing investigation into the spectacular implosion of the Terra ecosystem, South Korea’s Ministry of Foreign Affairs wants to void the passport of Do Kwon, the co-founder of the now-defunct Terraform Labs.
The move comes after a Seoul court issued an arrest warrant against Kwon and five other culprits on Wednesday.
South Korea Tightens Noose Around Do Kwon
The law is finally catching up with Terra’s Do Kwon.
A Thursday report from local media house Munhwa Ilbo has revealed that the Seoul Southern District Prosecutor’s Office for Financial and Securities Crimes requested the Ministry of Foreign Affairs to revoke the passports of Do Kwon and five other South Korean nationals to force them to return to the country.
The Ministry of Foreign Affairs immediately ordered Kwon and his accomplices to return their passports. The government ministry also levied administrative sanctions, which prohibit the issuance of new passports to the six persons of interest currently residing in Singapore.
Although it usually takes approximately one month for a passport to be voided, Korean prosecutors will likely force Kwon and the five other individuals to surrender their passports before the stipulated time expires.
Terra’s Trouble-Ridden Post-Implosion Path
A manhunt for all six individuals was launched yesterday on allegations of violating Korean capital markets law. Kwon was repeatedly asked to turn himself in to the Korean authorities but failed to do so, forcing prosecutors to follow other legal routes.
The arrest warrants were issued months after the widely-documented crash of the Terra network back in May. After briefly becoming the crypto market’s third-largest stablecoin by market capitalization, the Terra ecosystem careened into catastrophe after UST lost its dollar peg. Amid the implosion, LUNA, formerly a top 10 token by market cap, tanked to zero.
A brutal crypto market downturn and the bankruptcies of several high-profile crypto lenders and brokers, including Three Arrows Capital, Celsius Network, and Voyager Digital ensued.
Terra’s meltdown prompted a wave of probes from Korean regulators, the U.S. Securities and Exchange Commission (SEC), and a flurry of criminal and civil lawsuits despite attempts by Kwon to salvage the network following the dual implosion of UST stablecoin and its sister token LUNA.
Prosecutors conducted raids on seven local cryptocurrency exchanges in July as part of investigations into the activities of Terraform Labs. The officials also accused Kwon of intentionally defrauding investors and operating an elaborate Ponzi scheme.
Notably, many likened Kwon to Elizabeth Holmes — the infamous Theranos founder and CEO who is awaiting a criminal sentence for fraud.
The Terra creator resurfaced last month for his first public interview in a bid to rehabilitate his soiled image. He did assume responsibility for Terra’s tragic failure but also claimed there may have been a mole at Terraform Labs. Nonetheless, observers slammed the interview for glossing over some of the community’s essential questions regarding the Terra blowup.