Days after South Korean prosecutors expressed concerns about Terraform Lab’s founder Do Kwon being on the run, Interpol issued a “Red Notice” to arrest him. The Seoul Southern District Prosecutors’ Office requested the international criminal police organization to issue the lookout.
The Red Notice is a request made by a member country to law enforcement worldwide for the location and arrest of an individual pending extradition, surrender, or similar legal action. As such, Kwon has become a wanted individual and faces arrests in nearly 200 countries. Last week, South Korean prosecutors highlighted that Kwon was obviously on the run and refusing to cooperate. But the Terraform Lab’s founder denied these allegations in a series of tweets. He said he did not have anything to hide. A South Korean court had issued a national warrant for his arrest earlier this month. Moreover, prosecutors had wanted Kwon’s passport revoked in an effort to have him returned to South Korea.
As the bear market gripped the cryptocurrency market, Terraform Lab’s algorithmic-powered stablecoin UST lost its dollar peg and collapsed. This also had a spiral impact on the LUNA token. Over $60 billion literally disappeared overnight with LUNA and UST holders across the world losing their investments. The fall of UST and LUNA was so massive that it took with it Three Arrows Capital, a crypto hedge fund.
The UST fiasco, according to experts, exposed the shortcomings in algorithm-based stablecoins. Terraform Labs depended on a computer code to self-stabilize its value by creating and destroying UST and LUNA in a sort of supply-and-demand seesaw effect. Now, Interpol and the Financial Action Task Force are in a joint asset recovery initiative to hold Kwon accountable.