Two days after Terraform Labs cofounder and CEO Do Kwon tweeted that he was “not on the run,” South Korean authorities have asked Interpol to locate and arrest the executive because he is allegedly not cooperating with the investigation into the collapse of the company’s stable coins, TerraUSD and Luna.
The decision by South Korean prosecutors to loop in Interpol, reported by the Financial Times on Monday, is the latest twist in the disastrous case of Terraform Labs, which in May collapsed and saw the market cap of its two stablecoins go from more than $US60 ($83) billion to nearly zero. Investors in the TerraUSD and Luna coins accuse Kwon of running a Ponzi scheme, and South Korean prosecutors are investigating him for purported fraud and tax evasion.
Specifically, South Korean authorities asked Interpol to issue a so-called “red notice,” which is a request to law enforcement worldwide to “locate and provisionally arrest a person pending extradition, surrender, or similar legal action.”
Monday’s red notice against Kwon came after a funny yet infuriating back-and-forth between him and South Korean authorities over the weekend over the meaning of “on the run.” In short, the Terraform Labs cofounder on Saturday said he was “not on the run,” while the Seoul Southern District Prosecutors Office on Sunday said Kwon was “obviously on the run,” the Yonhap News Agency reported.
“I am not ‘on the run’ or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide,” Kwon tweeted on Saturday. “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.”
I am not “on the run” or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide
— Do Kwon 🌕 (@stablekwon) September 17, 2022
Cheekily, the Terraform Labs co-founder added: “Cheers 🥂”
On Sunday, South Korean prosecutors said that he flew to Singapore in April and was “obviously on the run.” That was right around the same time he dissolved the Terraform Labs South Korean office. Prosecutors allege Kwon did this to “evade investigation.” South Korean authorities have issued an arrest warrant for Kwon and for Terraform Labs’ head of research Nicholas Platias.
Back in May, documents from the South Korean Supreme Court seemed to show that Kwon and other Terraform executives decided to close the firm’s Korean office one week before the crash of TerraUSD and Luna, a very suspicious coincidence that the company swore was actually months in the making.
Furthermore, according to the Yonhap News Agency, South Korean prosecutors state that the Terraform Labs co-founder informed them through his lawyer in August that he had no intention to appear before them for questioning.
“Currently, we are in the process to locate the whereabouts of suspect Do Kwon and apprehend him,” a prosecution official said.
Meanwhile, Singapore police said on Saturday that Kwon was no longer in the country.