Interpol issues red notice for Terraform founder Do Kwon

Interpol has issued a red notice for Do Kwon, asking law enforcement agencies worldwide to find and arrest the founder of blockchain startup Terraform Labs collapsed earlier this year and wiped out $40 billion of investors.

Kwon faces charges in South Korea for siphoning off investors’ money, prosecutors said.

The notice against Kwon — which a spokesperson for South Korean prosecutors confirmed to TechCrunch — could set the wrong precedent for the crypto industry and hurt innovation, especially if Kwon didn’t knowingly deceive investors and customers, several industry executives have said in recent weeks.

“Having met Do Kwon … aside from him being human … I think criminalizing Terra is a dangerous precedent,” Haseeb Qureshi, managing partner of crypto investment fund Dragonfly, said in a recent podcast. However, Qureshi cautioned that he, like many others, does not know all the details.

South Korean prosecutors have doubled down on their investigation of Kwon in recent weeks, charging earlier this month that the entrepreneur was “uncooperative” and “apparently on the run,” a day after Kwon indicated otherwise. They asked Interpol, the global police organization, to issue a red notice for Kwon earlier this month.

Terraform Labs’ so-called UST stablecoin and LUNA cryptocurrency plummeted in May after investors lost faith in the efficacy of their fundamentals. Kwon, with the approval of the Terraform community, has revived the crypto project, but has avoided the so-called algorithmic stablecoin component for now. The demise of TerraUSD (UST), the firm’s previous stablecoin, caused the LUNA token to collapse as they were intertwined.

The LUNA token crash too contributed to the deletion of Three Arrows Capital, once a high-profile crypto hedge fund. The fund’s collapse severely affected a number of crypto lenders, including BlockFi, from which it had borrowed billions of dollars.

South Korea issued an arrest warrant for Kwon earlier this month, a move that prompted many investors to sell their positions in the revived Luna token. “We are in the process of defending ourselves in multiple jurisdictions – we have held ourselves to an extremely high bar of integrity and look forward to clarifying the truth over the next few months,” Kwon said in a tweet this month.

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