Wanted Terra crypto developer may be trying to evade probes, but Do Kwon denies being on the run

Wanted crypto developer Do Kwon, who is accused of defrauding investors following the $45 billion (€45 billion) collapse of his cryptocurrencies Luna and TerraUSD, is reportedly trying to evade South Korean authorities.

Kwon moved from South Korea to Singapore, where the now-defunct stablecoin issuer Terraform Labs, which he co-founded, has a base. However, the Singapore Police Force said on Saturday that he is currently not in the city-state.

South Korean prosecutors told Bloomberg in a text message on Monday that there has been “circumstantial evidence of escape” since he left Singapore. The media said prosecutors declined to comment on whether the office knows about Kwon’s whereabouts or whether it will contact the international police agency Interpol.

Last week, Kwon was charged with violating the Capital Markets Act and an arrest warrant was issued for him and five others allegedly linked to the case who are believed to be in Singapore.

Kwon defended himself in a tweet on Saturday, saying he was not on the run and “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 of those next months”.

Terra’s UST and its sister LUNA tokens lost almost $45 billion (€45 billion) in value within 72 hours in May after it imploded, causing other cryptos to take a hit and also causing the bankruptcy of three crypto companies.

The latest entity to collapse was Three Arrows Capital, which gave billions to creditors.

“I, and I alone, am responsible for any weaknesses that could have been presented for a short seller to start making money,” Kwon said in an August interview with the NFTV series Coinage. He also said he was cooperating with the authorities and reiterated his commitment to Terra.

In late May, Terra relaunched its Luna token, without the element that caused Terra’s precipitous fall – its stablecoin UST.

But news of the warrant has shocked the crypto market, sending the Luna token down more than 16 percent on Wednesday (September 14).

Stablecoins claim to be a relatively safe haven in the highly volatile crypto market. They are meant to be pegged to a fiat currency and usually maintain a 1-to-1 link with the US dollar.

However, UST, created by Terraform Labs, was an algorithmically stable coin, meaning that instead of having cash and other assets in a reserve to back the token, it used a complex mix of code and Luna to stabilize the process.