Authorities in South Korea have consulted Interpol for assistance in apprehending Do Kwon, the mastermind of an $89 billion virtual currency implosion, as they attempt to charge him with offenses including violating capital-markets regulations.
On Monday, defense attorneys requested Interpol’s assistance in locating Kwon, whose exact location is unconfirmed, and having him given over to Korea, the state’s attorney’s office stated in a text late on Monday.
After having received an official plea for help, Interpol would generally issue a red notification needing support from police departments around the world to make an arrest. A notification could take up to a week to be released.
Kwon relocated from South Korea to Singapore, in which his now-defunct Terraform Labs venture had a command center, but the city-state claims he is no longer there. Furthermore, Kwon has refuted being on the run, even though prosecution in Seoul seeks his arrest and claims he is attempting to avoid justice.
Since he left for Singapore, there has been corroborating evidence of his escape, which is why an incarceration warrant has been issued in the first place, according to the state’s attorney’s department.
The collapse of the TerraUSD computational stablecoin and its sister coin, Luna, triggered massive losses in cryptocurrency markets that were already struggling to recover from tighter fiscal policy. Virtual currencies have yet to recover, and regulatory authorities are combing through the ruins to figure out how to prevent a recurrence.
In South Korea, previous enthusiasm for cryptocurrency is giving way to rising contempt.
Kwon posted on Twitter over the weekend that he has nothing to conceal and is fully cooperating with authorities, but he did not disclose his coordinates.
We are trying to defend ourselves in various jurisdictions – we have held ourselves to an exceptionally high standard of honesty and look forward to confirming the truth in the coming months, he also stated on Twitter.
However, federal authorities told the Yonhap News Agency in a document that Kwon is not complying with investigations and has told authorities through a lawyer that he has no actual intent of making an appearance before them for questioning.
Kwon, alongside five others, has been facing being arrested in South Korea in connection with the Terra unraveling. Authorities could revoke his passport, requiring him to come back to Seoul within two weeks of being given the notice of invalidation.
According to public documents, he has a Singapore job pass that is set to expire on December 7th, and development for a new pass is pending.
The TerraUSD stablecoin, also recognized as UST, collapsed from its dollar peg relatively early this year, bringing down Kwon’s ecosystem. This has prompted investigations as far away as the United States, amid ongoing regulatory oversight of stablecoins, which are rumored to be pinned to an asset such as the Dollar.
Meanwhile, cryptocurrency firms are awakening to the need for much better risk management following a string of failures, which include Terra, the Three Arrows Capital investment firm, and virtual currency loan company Celsius.
Authorities are posing questions such as, “How vulnerable were businesses to some of these downed operators?” and want to take steps to ensure default risk is resolved, according to Sagar Sarbhai, chief of enterprise solutions and consulting at Fireblocks.
Why This Arrest is Important?
One of the severe issues that has faced the crypto industry has been the lack of accountability faced by major players. With so much money moving around, the fact that individuals have not previously been held accountable for their decisions, which have cost individuals and organizations tons of money, is absolutely absurd.
Kwon’s arrest should usher in a new era of risk management from those who establish major crypto funds or coins due to a fear of facing similar repercussions. This creates a safer environment for any stakeholders in the industry.
The Bottom Line
After losing billions of Dollars, it was only a matter of time before Kwon would have authorities coming after him. It seems that the times have finally caught up to him. Although he states that he is not escaping any responsibility for the losses, the evidence suggests otherwise. Once he has been apprehended, he should face the extent of the law.