A Seoul court issued an arrest warrant for Terraform Labs (TFL) CEO Do Kwon and five other individuals on charges including violations of South Korea’s Capital Markets Act. Bloomberg reports.<\/p>\n
According to the prosecution, six of the defendants are in Singapore. Do Kwon did not respond to Bloomberg’s requests.<\/p>\n
The collapse of the Terra ecosystem had serious consequences for the digital asset market. The devaluation of LUNA and UST inflicted substantial losses on users of Anchor Protocol.<\/p>\n
The incident also affected the solvency of major players in the industry: the crypto-lending platform Celsius was one of the largest holders<\/a> of UST, and the hedge fund Three Arrows Capital invested<\/a> about $200 million in LUNA in the February token sale<\/a>.<\/p>\n The situation around the project drew the attention of<\/a> regulators in South Korea. The Seoul Southern District Prosecutor’s Office became interested in<\/a> in TFL’s activities.<\/p>\n Recall that in June 2022 investors accused<\/a> Terraform Labs and Do Kwon personally of false statements about the stability of UST.<\/p>\n In the same month, the company’s CEO stated that he did not consider himself a fraud<\/a>. He also denied<\/a> allegations of withdrawing $2.7 billion from the Terra ecosystem before its collapse.<\/p>\n In July, the Seoul Southern District Prosecutor’s Office conducted searches<\/a> at the co-founder’s home Daniel Shin and the office of early investor Dunamu & Partners.<\/p>\n Earlier it became known that the people behind the UST stablecoin attracted the interest of<\/a> the US Securities and Exchange Commission.<\/p>\n