Global hunt on for South Korea’s Do Kwon as Terraform collapse rocks cryptocurrency confidence
- Interpol red notice out for Kwon, who faces various charges of violating capital markets after US$60 billion of tokens wiped out
- Investor confidence in cryptocurrencies shaken, but speculative attackers seeking to gain from unstable market conditions also to blame for crash, analyst says
The legal troubles faced by Do Kwon, the South Korean co-founder of Terraform Labs, have dealt a “serious blow” to public confidence in cryptocurrency and digital assets, analysts say, as Seoul confirms an Interpol red notice has been issued for him.
Kwon, 31, faces various charges of violating capital market rules after a whopping US$60 billion of tokens he created were wiped out.
Investors in May filed complaints against Kwon, accusing him of running a Ponzi scheme following the crash of both the blockchain giant’s coins, the TerraUSD algorithmic stablecoin and its sister token Luna.
“However, it is difficult to consider the algorithmic stablecoin itself as fraudulent,” she told This Week in Asia, blaming speculative attackers seeking to take advantage of unstable market conditions for the crash.
Lawyers of investors and other critics have said the firm’s “Anchor Protocol” financial instrument, which provides investors with a yearly yield of 19 per cent, has been unsustainable from the beginning and the first investors needed money provided by later investors to keep afloat.
