Global manhunt begins for crypto boss after stablecoin loses $45 billion

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South Korea’s Special Financial Crimes Unit launches investigation into Kwon’s Terra after a group of five investors filed criminal complaints

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International police organization Interpol has issued a red notice for the boss of crypto firm Terraform Labs Do Kwon, after prosecutors in South Korea said he had failed to cooperate with their investigation, following which his whereabouts were worldwide. The search has started.

Do Kwon has hit back at reports he is on the run from police, saying in a tweet last week: “I’m not “running” or anything like that – to any government agency that showed interest in communicating Yes, we are fully cooperating and we have nothing to hide.”

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Founded in 2018 by Kwan, TerraForm Labs created the Terra USD stablecoin and the Luna token, which both collapsed in May 2022, wiping out their $45 billion market cap in a matter of hours.

The collapse sent shock waves across the crypto world, with hedge fund Three Arrows Capital (3AC) subsequently filing for bankruptcy, revealing the extent of Terra’s exposure. The demise of the fund destabilized several other crypto companies with which 3AC had close financial ties. In June, 3AC defaulted on a $675 million loan from New York-based cryptocurrency broker Voyager Digital. Voyager subsequently filed for bankruptcy after suspending customer trading, deposits and withdrawals.

South Korea’s Special Financial Crimes Unit launched an investigation into Terra after a group of five investors filed criminal complaints accusing Kwon of fraud.

A red notice is issued by Interpol requesting law enforcement agencies around the world to search for a fugitive who is either on trial or serving a sentence. There are currently around 7,152 active red notices in circulation.

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