Retail investors are becoming vigilant in the hunt for crypto’s most wanted man

Kang Hyung-suk’s faith in cryptocurrencies was shattered by the $40 billion collapse of Do Kwon’s cryptocurrency operator Terraform Labs, where he used to work in Seoul. Now he’s looking for payback.

In about 10 days, Kang flies to Dubai, the capital of the crypto-friendly United Arab Emirates, where he believes Kwon is hiding. “Finding him may be easier than thought,” Kang said.

The 26-year-old software engineer belongs to the UST Restitution Group, an association of nearly 4,400 crypto investors trying to track down Kwon, who is wanted in South Korea on charges of financial fraud.

“I want to recruit others to join the search,” Kang said. “It’s a 50-50 chance of getting him in Dubai.”

The international hunt for Kwon, a 31-year-old Stanford-educated entrepreneur, is intensifying as retail investors try to recover from the devastating losses caused by the collapse of his terraUSD and luna coins in May.

Investors have launched class action lawsuits against Kwon in Singapore and the US, while Interpol has issued a red notice for him. South Korea is expected to revoke his passport on Wednesday.

Kwon claimed in an interview on the crypto podcast Unchained this week that the charges against him are not “legitimate” and “politically motivated”. He said he was complying with document requests from South Korean prosecutors and apologized to the victims of the blockchain system’s collapse.

He denied any wrongdoing but refused to reveal his whereabouts, citing security concerns. His last known location, at the end of April, was Singapore, according to South Korean authorities.

URG members share their findings about Kwon and his company via Discord, a social messaging platform, and scour the Internet for clues to his whereabouts. Members have suggested that Kwon may be in Dubai, Russia, Azerbaijan, Seychelles or Mauritius, among others.

“Dubai is crypto-friendly, very international (he didn’t want to stand out), and has limited extradition agreements in place,” a URG member wrote in a report dated September 28. “It seems to be the best fit for the 3-5 hour time zone shifts evident in the data.”

URG consists of members from all over the world. “His days are numbered,” said a top URG member nicknamed Antithesis, who introduced himself as a 31-year-old Ivy League-educated American. “We have people who are very, very close to Do Kwon.”

He claimed his group did “a lot” of work to track down Kwon. “Obviously, I didn’t want to go into detail because publishing our methods would render them ineffective. I think we do more than anyone else.”

Antithesis, who said he lost a large chunk of his savings worth several hundred thousand dollars betting on terraUSD, called the experience “devastating.”

“The whole schedule of my life has been changed and set back many years. “The stress on top of that probably shaved years off my lifespan as well,” he said.

Another URG member nicknamed HKTrader, who said he worked for a fintech company headquartered in Hong Kong and had blown his savings on a house on terraUSD, spent a month organizing a class action lawsuit against Kwon in Singapore and discovered where he found himself in the country by hiring a private detective.

“We tracked [him] down pretty well when he was in Singapore,” he said, adding that his group lost track of Kwon after he left the city-state.

He is skeptical of Interpol’s ability to locate Kwon. “You know how Interpol works. It is up to the host country to act, he said.

But even if Kwon was arrested and extradited to South Korea, experts said it would not be easy to convict and punish him for financial fraud or violating capital market rules because of uncertainty over whether crypto is subject to securities laws.

“I wonder how effective legal actions against him could be, given the lack of legal basis to punish crypto players,” said Choi Hwa-in, a crypto expert in Seoul.

“This would only further burden the crypto market, drag down its value and hurt investors more as a result.”

This month, a South Korean court rejected prosecutors’ request to issue an arrest warrant for Kwon’s close aide who ran Terraform Labs’ business operations, questioning whether terraUSD and luna qualified as investment securities under the country’s capital markets law.

Terraform Labs said the company would continue to communicate with authorities, but accused South Korean prosecutors of talking to the press.

“Recent developments confirm that Terraform Labs and its stakeholders remain exposed to a highly politicized and erratic legal environment in South Korea,” the company said.

“The facts are on our side and we look forward to the truth coming out in the coming months.”

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