September 27, 2022

South Korean court issues arrest warrant for Terra founder

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According to the data, a South Korean court issued an arrest warrant for the founder of the blockchain startup Terra and the head of Terraform Labs, Do Kwon. It became known that law enforcement agencies of the city of Seoul received permission to detain an entrepreneur, as well as 5 more people who may be involved in fraud.

This order was issued several months after the Terra (LUNA) ecosystem and its stablecoin TerraUST (UST) collapsed, leading to a negative ripple effect in the cryptocurrency markets. Due to the collapse of the project, several hundred thousand investors lost billions of US dollars (USD).

Industry experts noted that this situation has seriously affected the industry. This has led many countries to rethink the regulation of stablecoins. In addition, several large cryptocurrency startups and other companies have been declared bankrupt, including the well-known hedge fund Three Arrows Capital (3AC).

Immediately after the publication of information about the arrest of Kwon, the Terra cryptocurrency rate collapsed in just 1 hour. The virtual currency fell 22.4% and was trading at $3.33 at the time of writing. The market capitalization was $423.79 million.

Recall that Do Kwon talked about his life before and after the fall of the Terra ecosystem. The entrepreneur noted that he did not expect such a scenario and was very worried about it. The businessman stressed that all responsibility for what happened lies on his shoulders.

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