Law is trying to catch up to Do Kwon, the CEO of Terraform Labs, who oversaw the monumental rise and collapse of LUNA and the UST stablecoin. But will it be game over for the erstwhile DeFi wunderkind and his token, LUNC? Find out more.
King of the ‘LUNAtics’ to a Man on the Run?
Do Kwon used to be one of the most influential personalities in the blockchain world. The brash and outspoken founder of Terraform Labs grew the LUNA coin at a dizzying speed. Band of investors and supporters who proudly referred to themselves as “LUNAtics” rallied behind the project, hyping it up to be the next big thing in crypto.
The hype, though, was short-lived as billions were wiped out after LUNA’s collapse earlier this year and created a domino effect on the entire crypto economy.
The important point, however, is who was left holding the bag when it all came crashing down. Several big investors sold out early, reaping substantial profits, while small traders suffered devastating losses. South Korean investigators also produced documents that suggested that Kwon decided to shut down Terra’s South Korea office just a few days before the crash. This led to the framing of fraud charges against the Terra founder.
The Red Notice Trouble
Over the past few days, authorities in South Korea have taken several steps to hold Kwon accountable. First, a warrant has been issued against him officially making him, ‘a wanted man’. The Korean authorities are also moving to revoke his passport and have started a formal process to place Kwon on Interpol’s red notice list.
Currently, Kwon is believed to be in Singapore, which doesn’t have an extradition treaty with South Korea. Singaporean officials though have reported that Kwon has already left the country. This raises doubts on whether or not he would actually face justice.
Is it game over for LUNC and Kwon?
LUNC was rallying last week following the 1.2% tax burn proposal. However, the gains seem to be reversing as traders booked profits and the news of Do Kwon’s arrest warrant surfaced. With its lead hype man under a lens, efforts to revive the failed project are looking bleak.
Kwon, for his part, insists that he’s “not on the run” though he refuses to reveal his whereabouts.
Official pursuit of individual offenders in the crypto world is rare. This case, however, could be a bellwether for projects that pull the rug on investors without providing any recourse to recoup the funds.
Sources:
1. https://gizmodo.com/terra-luna-crypto-stablecoin-blockchain-do-kwon-1848954627?authId=1*17opzf7*_a*UTVfOFl3c3BRVXltYm43ZUZkNTRjX0lLN0h3UFMxWlQ3MkdwbDVycWtEWURodG5wQWpvX3I4WmZCM2w4b09LWg
2. https://www.reuters.com/technology/singapore-police-says-wanted-crypto-developer-do-kwon-is-currently-not-singapore-2022-09-17/
3. https://crypto.com/product-news/terra-classic-tax-burn
