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South Korea asks Interpol to find man behind $60bn crypto collapse

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Do Kwon, co-founder and chief executive officer of Terraform Labs. Photo: Woohae Cho/Bloomberg

Do Kwon, co-founder and chief executive officer of Terraform Labs. Photo: Woohae Cho/Bloomberg

Do Kwon, co-founder and chief executive officer of Terraform Labs. Photo: Woohae Cho/Bloomberg

South Korean prosecutors have asked Interpol for help in arresting Do Kwon, the source of a $60bn (€59.9bn) cryptocurrency wipeout, as they seek to charge him with alleged crimes including breaking capital market laws.

Prosecutors on Monday have made a request to Interpol for their assistance to locate Kwon, whose whereabouts remain unknown, and to have him handed over to Korea,” the prosecutors’ office said yesterday.

Interpol would typically issue a red notice seeking assistance from law enforcement globally to make an arrest after receiving an official request for help. It could take about a week before a notice is issued.

Mr Kwon had moved from South Korea to Singapore, where his now collapsed Terraform Labs project had a base, but the city-state says he is no longer there. He has denied being on the run, even as prosecutors in Seoul seek his detention and say he is trying to avoid redress.

There has been “circumstantial evidence of escape” ever since he left for Singapore, and that is why an arrest warrant was issued in the first place, the prosecutors’ office said earlier.

The implosion of the TerraUSD algorithmic stablecoin and its sister token Luna sparked huge losses in crypto markets, which were already reeling from tightening monetary policy.

Digital assets have yet to recover and regulators are poring over the wreckage to see how to avoid a repeat. In South Korea, enthusiasm for crypto is being replaced by growing disdain.

Mr Kwon tweeted over the weekend that he doesn’t “have anything to hide” and is in “full co-operation” with officials, but didn’t publicly reveal his location.

“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,” he also said on Twitter.

However, the Yonhap News Agency cited prosecutors as saying that Mr Kwon is not co-operating with probes and has told investigators via an attorney that he has no intention of appearing before them for questioning. He faces arrest in South Korea along with five others over the Terra unravelling. Officials could cancel his passport, which in theory would require him to return to Seoul within 14 days.

He has a Singapore employment pass which is due to expire on December 7 and an application for another pass is pending, government records show.

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The TerraUSD stablecoin, also known as UST, crumbled from its dollar peg earlier this year and brought down the ecosystem Mr Kwon had built. It has triggered probes as far afield as the US amid renewed regulatory scrutiny of stablecoins – tokens supposed to be pegged to an asset like the dollar.

Crypto companies, meanwhile, are also waking up to the need for far stronger risk management after a series of blow-ups including Terra, the Three Arrows Capital hedge fund and crypto lender Celsius.


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