South Korean prosecutors refuted Do Kwon’s claim over the weekend that he was not in hiding and asked Interpol to issue a red notice against the Terraform Labs co-founder. escalating the publicly unfolding drama after wiping out $40 billion of his cryptocurrency startup in May of this year.
The Seoul Southern District Prosecutor’s Office said Kwon was not cooperating with the investigation and had told them (through his lawyer last month) that he had no intention of appearing for questioning, according to official statements cited by local media Yonhap. Prosecutors have asked Seoul’s foreign ministry to revoke Kwon’s passport and said they have “circumstantial evidence” that Kwon is trying to flee.
Interpol red noticewhich is a call to law enforcement agencies worldwide, can prevent individuals from being issued visas, restrict their cross-border travel and “temporarily arrest a person pending extradition, surrender or similar legal action.”
Kwon said over the weekend that he is not hiding from any government agency that has “expressed an interest in communication.” He added in a tweet: “We are in full cooperation and have nothing to hide.”
Terraform Labs’ so-called UST stablecoin and LUNA cryptocurrency dramatically broke out in May after investors lost faith in the efficacy of its fundamentals. Major crypto exchanges including Binance and Coinbase delisted the token and terminated several of its trading pairs. (Many exchanges have since revived limited support for the old token.)
Kwon, with the approval of the Terraform community, revived the crypto project, but this time avoided working with the so-called algorithmic stablecoin. 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, a once high profile crypto hedge fund. The fund’s collapse also severely affected a number of cryptocurrency lenders from which it had borrowed billions of dollars.
South Korea issued an arrest warrant for Kwon last week, a move that saw many investors 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 over the weekend.
In an interview with Coinage last month, Kwon said he has not been in contact with South Korean authorities. After the two coins – Luna and TerraUSD – collapsed earlier this year, wiping out around $40 billion of hundreds of thousands of investors’ money, investors in South Korea and the US filed lawsuits against Kwon for illegal fundraising and fraud.
South Korean prosecutors charged Kwon with financial fraud. Terraform Labs and the prosecutor’s office could not immediately be reached for comment.