(Kitco News) - Officials in South Korea have verified that Interpol has issued a global request for the arrest of Terraform Labs co-founder Do Kwon, who faces charges related to his role in the $60 billion collapse of the Terra (LUNA) decentralized finance (DeFi) protocol.
The Seoul Southern District Prosecutors’ Office confirmed the development on Monday after making the request for Interpol to issue a Red Notice at the beginning of last week. The office has accused Kwon and five others of crimes, including breaches of capital-markets law.
A Red Notice, which is different than an arrest warrant, is a request made at the direction of a member country to law enforcement worldwide for the location and arrest of an individual pending extradition, surrender or similar legal action.
According to the FAQ section on the Interpol website, “INTERPOL cannot compel the law enforcement authorities in any country to arrest someone who is the subject of a Red Notice.”
Kwon is rumored to have been residing in Singapore since abandoning his home in South Korea following the collapse of Terra and its TerraUSD (UST) stablecoin coin in May.
The South Korean court issued a national warrant for Kwon’s arrest earlier in September, which led to the Red Notice request from Interpol.
The prosecutor’s office said they issued the arrest warrant for Kwon in part because there was “circumstantial evidence of escape” ever since he left for Singapore. Last week, the office implied that Kwon was “obviously on the run” from authorities and refusing to cooperate, accusations which Kwon later denied in a series of tweets.
“I am not 'on the run' or anything similar - for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide,” Kwon tweeted. “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.”
In a reply to a Twitter post on Monday, Kwon said that he is “making zero effort to hide,” and further elaborated by saying, “I go on walks and malls, no way none of [crypto Twitter] hasn't run into me the past couple weeks.”
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On Saturday, the Singapore Police Force released a statement saying that Do Kwon is not currently residing in the city-state. Whether the global notice results in Do Kwon’s arrest will depend on his actual location and the local authority's willingness to act on it.
The main source of Terra’s collapse was its algorithmic stablecoin UST, which was meant to keep a constant value of $1 through a complex system involving Terra’s native LUNA token. Once the system created by Kwon started to falter, confidence and trust disappeared and the system collapsed.
Since then, the failed algorithmic stablecoin project has drawn additional scrutiny to the industry from lawmakers in the EU and US and led to various legislative proposals designed to reduce or prevent additional harm from stablecoins.
