The International Criminal Police Organization (Interpol) issued a red notice for Terraform Labs founder Do Kwon on Sept. 26, requesting law enforcement worldwide to locate and arrest him, as reported by TechCrunch.
Interpol releases such notices for fugitives that are wanted either for prosecution or to be sentenced. As per the institutions’ global stance, Interpol’s red notices apply to all law enforcement worldwide. In other words, Do Kwon has nowhere to run.
Do Kwon on the run
Tera’s stablecoin TerraUSD (UST) lost its peg in early May, leading to the collapse of the Terra (LUNA) ecosystem and the emergence of the coldest winter in crypto history. The community mostly believes that a coordinated attack by Kwon caused the failure.
Days after its collapse, Do Kwon admitted he feared for his safety and requested police protection after an unknown individual attempted to enter Kwon’s house in Seoul. After the incident, Kwon fled Korea and moved to Singapore, saying that his location was revealed.
After that, Kwon was accused of withdrawing $80 million per month and about $2.7 billion in total from the Terra project. As a result, the U.S. and South Korea collaborated to investigate the Terra Luna case. The U.S. Securities and Exchange Commission opened an investigation into Terra and Kwon to see if it broke the rules for securities and investment products. On the other hand, Kwon claimed that the SEC investigation was run on ‘misinformation.’
In July, South Korea issued a notification of arrival for Kwon — obligating related authorities to notify law enforcement if Kwon entered the country. Weeks passed as the investigations continued, and Kwon lawyered up against South Korea.
On Sept. 14, South Korea issued an arrest warrant for Kwon, saying he was unresponsive in communicating with the authorities to contribute to the investigation. On Sept. 19, South Korea requested Interpol to aid in the search by issuing a worldwide arrest warrant for Kwon.
Impact on the crypto industry
The Terra collapse affected staked Ethereum (ETH) and led to a domino effect that caused Three Arrows Capital (3AC) and Celsius to go bankrupt. It also started the most challenging winter market ever seen in crypto history, leading to a downsizing trend and miners’ sell-off.
In addition to all these, the Kwon case has the potential to impact crypto’s reputation further. Crypto investment company, Dragonfly’s Managing Partner, commented on the Kwon case during a podcast and said:
“Having met Do Kwon … leaving how he is a person aside … I think the criminalization of Terra is a dangerous precedent,”
South Korean authorities also admitted that the Kwon case might cause fear, set a wrong precedent for the crypto industry, and hurt innovation.