One of the events that caused the catastrophic collapse of cryptocurrencies was the de-pegging of the TerraUSD stablecoin from the US dollar when $60bn of value was erased. Due to this monumental failure of a financial product, South Korea, Do Kwon’s home country, has attempted to extradite him from Singapore. He has been placed on the Interpol red list and South Korea is planning to take his passport from him. There has been some debate as to whether Do Kwon should be held liable for what wasn’t a planned failure, and can’t clearly be seen as fraud. This was discussed in more detail in the latest episode of CrypTalk. More in this article from Bloomberg. – Ross Sinclair

By Joanna Ossinger and Sangmi Cha

(Bloomberg) – South Korea is set to strip Terraform Labs Pte founder Do Kwon of his passport, intensifying pressure on the fallen entrepreneur to return to the nation and face charges over a $60 billion crypto crash.

The 31-year-old must hand the document back or else it will be revoked in about 14 days, according to a government notice posted on Wednesday. Kwon’s location is unclear and he is the subject of an Interpol red notice.

Do Kwon, co-founder and chief executive officer of Terraform Labs, works on his laptop in the company’s office in Seoul, South Korea, on Thursday, April 14, 2022. Kwon is counting on the oldest cryptocurrency as a backstop for his stablecoin, which some critics liken to a ginormous Ponzi scheme.

Kwon was behind the TerraUSD stablecoin, which was meant to have a constant $1 value in a complex arrangement with sister token Luna. The edifice fell apart in May, worsening a $2 trillion crypto rout, pushing a range of digital-asset firms toward insolvency and causing consternation at regulators globally.

He and five others have been accused of breaching South Korea’s capital-markets law. Terraform Labs has rejected the charges and said the case has become “highly politicized.”

The Chosun Ilbo newspaper reported that prosecutors in Seoul have frozen an additional 56.2 billion won ($40 million) of assets they claim are Kwon’s, bringing the total to about 95 billion won. 

Kwon on Twitter said “I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.” He didn’t immediately reply to an email seeking comment.

Prosecutors on Thursday confirmed a local report that one of the people accused, surnamed Yu, had been arrested on charges including violations of the capital-markets law, fraud and breach of duty related to market manipulation. 

Read also:

• CrypTalk ep 8 – Why you should invest in crypto beyond the ‘greater fool’ theory
• Shorts rise against Ethereum as investors are sceptical about the success of ‘the merge’ 
• $30m in cryptocurrencies retrieved from North Korea’s ‘nuclear funding programme’ 

(Visited 62 times, 62 visits today)