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A court in South Korea issued an arrest warrant for Do Kwon, the founder of the Terraform Labs cryptocurrency ecosystem, and five others, all of whom are located in Singapore, the prosecutor’s office said, according to Bloomberg.

The court in Seoul issued a warrant for all of them, with allegations against them that include violations of the nation’s capital markets law.

Do Kwon didn’t immediately reply to an email by Bloomberg seeking comment.

Background

The Terra platform imploded in May 2022, which saw the collapse of the TerraUSD stablecoin after it crumbled from its dollar peg, shaking faith in the digital-asset sector, and sparking a global crypto rout, eventually bringing down the ecosystem.

Do Kwon also helped create Luna, another token that was part of the ecosystem, but then found himself at the centre of one of crypto’s biggest blowups.

The prices of both tokens tumbled to near zero.

They previously had a combined value of US$60 billion.

This was the start of Do Kwon's problems.

Investigations in more than one country

Terra’s unraveling triggered investigations in South Korea and the United States.

In July, prosecutors raided the home of Terraform Labs co-founder Daniel Shin, as part of investigations into allegations of illegal activity behind the collapse of TerraUSD.

Renewed regulatory scrutiny of stablecoins -- digital tokens that are pegged to an asset like the dollar -- was back on the cards.

Stablecoins are a popular vehicle for investors seeking to park cash away from more volatile coins, and they make it easier to move funds onto crypto exchanges, Bloomberg reported.

Kwon has said he plans to cooperate when the time comes.

In an interview with crypto media startup Coinage that floated the prospect of jail time, Kwon said: “Life is long.”

Top photo via Coinage YouTube