Despite of having various fraud charges and red notice of Interpol against him, Terra-Luna fonder Doo Kwon is still roaming freely.
Interpol’s Red Notice
Last year South Korean prosecutors had requested Interpol’s assistance to trace the whereabouts of Kwon, the wanted founder of Terraform Labs accused of fraud following the massive collapse of the firm’s cryptocurrencies earlier that year. The request had come after Singapore’s police said that Kwon was not in the city state, where prosecutors had believed he was residing.
The blockchain firm has been under investigation for alleged fraud and tax evasion after investors in its cryptocurrencies — TerraUSD and Luna — filed complaints against Kwon in May 2022, accusing him of carrying out a Ponzi scheme over the loss of billions of won following the crash of both coins earlier that month.
A South Korean court had also issued its own arrest warrant for Do Kwon, alleging that the cryptocurrency mogul was violating capital markets law. The failure of Do Kwon’s stablecoin Terra and its sister token Luna helped create the domino effect that led to this year’s major cryptocurrency crash. Crypto’s plunge further continued as major crypto lending firms became insolvent due to investment in Terra.
When the arrest warrant was issued, South Korean prosecutors believed Do Kwon was in Singapore. However, Singaporean authorities say the Terra creator is no longer in the country. Do Kwon later announced on Twitter that he was “not on the run” and was in “full cooperation” with the relevant government agencies. However, prosecutors in South Korea quickly disputed the claim and said Do Kwon was “obviously on the run.”
While Do Kwon may be able to avoid authorities in South Korea, Interpol’s “Red Notice” makes him a wanted man wherever he goes. On the flip side, his re-launched cryptocurrency endeavor Terra 2.0 seems unfazed by Do Kwon’s status as a fugitive. In fact, the cryptocurrency has actually spiked in value by more than 10 percent, seemingly as the news was breaking.
Laura Shin fraud charges
On the matter of voluntarily returning to South Korea to face fraud charges under the country’s Capital Markets Act (CMA,) Do Kwon said because cryptocurrencies are not classed as securities, he has interpreted the matter as outside the remit of authorities. He said:
“The consistent stance from Korean governments has been, and even from the Financial Services Commission directly, that cryptocurrencies are not securities… And it is not within the ambit of their jurisdiction to regulate cryptocurrency for that reason.” Do Kwon added that he was disappointed regulators were attempting to create new regulations through criminal enforcement proceedings.
Probing further, Shin flat-out asked Do Kwon if he disagreed with the arrest warrant and found the charges illegitimate. In response, the project co-founder said he did not receive a copy of the arrest warrant. Shin shut down this statement, pointing out that a pdf copy was made available to him. Kwon then clarified that he did not read the pdf, reiterating his previous comments that cryptocurrencies fall outside the purview of the CMA.
Why No arrest?
According to an expert, Attempts to extradite Do Kwon from Serbia have failed because prosecutors have so far been unable to convince a court in Seoul that the charges against him can stand. An additional complication is South Korea and Serbia do not have an extradition agreement.
“The prosecutors have failed to establish the fraud charges as their arrest warrants for other Terra-Luna employees were rejected by the court along with their characterization of Luna as an investment security,” He said in an interview.
