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Thursday, December 8, 2022

Wanted South Korean Founder of Failed Cryptocurrency Firm Denies Absconding

Late on Saturday, the Singapore police updated in an email response that “Do Kwon is currently not in Singapore”

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SOUTH KOREA: The founder of the failed cryptocurrency company Terra, Do Kwon, is wanted by the police and has denied being a fugitive or ‘on the run after Singapore investigators said he was not discovered in the city-state as had been believed.

Kwon’s whereabouts have been doubted and questioned by the police after a statement given by the Singapore police late on Saturday. Moreover, his tweets did not give the police any inkling as to where he might have fled to.

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The downfall of terraform Labs earlier this year wiped out nearly $40 bn of investors’ money. Kwon has been accused of fraud by five investors based in South Korea.

He is currently being investigated by a financial crimes unit and has emerged under the international radar by the Securities and Exchange Commission in the U.S.

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A South Korean court on Wednesday issued an arrest warrant for Kwon. Earlier on Sunday, he sent out a tweet, “I am ‘not on the run’ or anything similar”, but he did not reveal his location.

For any agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide,” he added.

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“We are in the process of defending ourselves in multiple jurisdictions… and look forward to clarifying the truth over the next few months.”

Photo Credit: Various Sources

The 31-year-old was believed to be in Singapore, where last month he gave his first media interview ever since the crypto operator broke down in May.

Late on Saturday, the Singapore police updated in an email response that “Do Kwon is currently not in Singapore”.

SPF will assist the Korean National Police Agency (KNPA) within the ambit of our domestic legislation and international obligations,” said the brief statement, which gave no further details.

Singapore’s renowned Straits Times newspaper has reported that Kwon’s work permit in the city-state was about to expire on 7 December, but its renewal may now be at supreme risk as his whereabouts currently remain unknown.

South Korean prosecutors have also issued arrest warrants for five other people – who were not named – linked to stablecoin TerraUSD and its sister token Luna.

Kwon’s company, Terra/Luna system, disintegrated in May, with the price of both tokens plummeting to near zero, and the fallout adversely affecting the wider crypto market. Its collapse stirred the entire crypto industry and resulted in a staggering loss of more than $500 bn.

Stablecoins are specially designed to have a relatively stable price and are usually linked to a real-world, tangible commodity or currency.

However, TerraUSD was algorithmic, using code to maintain its price at around one US dollar.

Following the breakdown of Luna and Terra in the market, many investors lost their precious life savings and South Korean authorities have opened multiple criminal probes into the reasons behind the crash.

Also Read: The ‘Blockchain Dilemma’ in the Cryptocurrency World

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