Terraform Labs co-founder Do Kwon faces arrest warrant in South Korea

A South Korean court issued an arrest warrant to Terraform Labs co-founder Do Kwon, a cryptocurrency ecosystem that imploded earlier this year. 

The arrest warrant is for Kwon and five others on allegations of violating the country’s capital markets law. 

They include the company’s head of research Nicholas Platias, who is one of the founding members, and the chief strategy officer of Chai Corporation Andy Han. 

Chai Corporation is a payments service company established by Terraform Labs co-founder Daniel Shin.

The Seoul Southern District Prosecutor’s Office is seeking cooperation from Interpol for their arrest. All six under the warrant are residing in Singapore. 

The investigative team was able to categorize the company’s Terra and Luna coins as a type of investment security in order to issue the warrants.

Until now, cryptocurrencies were not considered securities and were not subject to capital markets law in South Korea. 

South Korean prosecutors have been investigating Kwon and Terraform Labs for the past four months.

The value of Luna, the cryptocurrency linked to stablecoin TerraUSD, became worthless in mid-March, plummeting from a market capitalization of around $37.8 billion the week prior. 

Across the Pacific, a United States federal judge has ordered Kwon to comply with an earlier Securities and Exchange Commission (SEC) subpoena that he sought to avoid.

The SEC began investigating a Terraform Labs project Mirror Protocol last year and served Kwon a subpoena at a conference in New York City on Sept. 20, 2021.

Write to Jin-Seong Kim at jskim1028@hankyung.com
Jee Abbey Lee edited this article.