A South Koren court has issued an arrest warrant against Do Kwon, the Co-Founder of the collapsed stablecoin issuer, Terraform Labs that rattled the crypto industry earlier this year, as announced by the country’s Financial Crimes Unit of the Supreme Prosecutors Office.
The warrant also names five others, according to Bloomberg, for the alleged violation of the South Korean capital markets law. However, the identity of the five others is unknown yet.
Additionally, the South Korean prosecutor's office said that all six individuals are presently in Singapore. Earlier, Kwon said that he is cooperating with the investigation. However, he did not release any official statement after the arrest warrant.
A $40 Billion Collapse
The arrest warrant came four months after the promising stablecoin project collapsed, bringing down the $40 billion Terra ecosystem. Kwon was also the primary developer of the project.
The South Korean authorities raided the house of the Co-Founder of Terraform Labs, Daniel Shin in July. That was a part of the probe into the establishing criminal activities behind the Terra collapse.
On top of that, the collapse of Terraform Labs triggered a series of other fallouts in the cryptocurrency industry. Further, it is believed to have started the ongoing so-called 'crypto winter'.
The Asian hedge fund, Three Arrows Capital, was the latest to file for bankruptcy due to its prolonged exposure to the Terra ecosystem. Companies like Celsius Network and Voyager Digital also became insolvent.
In addition, the collapse of Terra prompted regulators to scrutinize stablecoins, which, on the surface, are immune to the wild volatility of the cryptocurrency markets.
Furthermore, reports of the arrest warrant impacted LUNA, the new token of the revived ecosystem. The price of the token has plummeted by 35 percent in the last few hours, as of press time.
