Disgraced Luna founder Do Kwon says he’s not on the run. But no one knows where he is.

Please fol­low and like us:
Pin Share

The per­son most close­ly asso­ci­at­ed with last spring’s cryp­to crash appears to be on the run after an arrest war­rant was issued for him — and inves­ti­ga­tors have asked for Interpol’s help to track him down.

Do Kwon, the South Kore­an devel­op­er of the Ter­raUSD and Luna cryp­tocur­ren­cies, is believed to have been in Sin­ga­pore since at least the spring, when those coins lost near­ly all of their val­ue. But Sin­ga­pore author­i­ties said this week­end he is no longer there, and South Kore­an inves­ti­ga­tors have report­ed­ly asked Inter­pol to issue a “red notice” that would allow offi­cers in mem­ber coun­tries to pro­vi­sion­al­ly arrest Kwon pend­ing extra­di­tion if they find him.

Last Wednes­day the Seoul South­ern Dis­trict Pros­e­cu­tors Office issued an arrest war­rant for Kwon and five oth­er peo­ple who worked on both the cur­ren­cies and Ter­raform Labs, the com­pa­ny that Kwon co-found­ed. Pros­e­cu­tors did not list the charges, but investors have said he defraud­ed them in pro­mot­ing the coins. Ter­raUSD — which used a com­put­er pro­gram that claimed to peg its val­ue to the U.S. dol­lar — and a relat­ed token known as Luna both took off in the past year, with each mul­ti­ply­ing in val­ue dozens of times over before crash­ing in May.

A Ter­ra spokesman did not reply to a request for com­ment. Kwon also did not reply to a request for com­ment. He said on Twit­ter Sun­day that “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 over the next few months.”

The red-notice request was orig­i­nal­ly report­ed by the Finan­cial Times.

Cryp­to’s plum­met tests the dura­bil­i­ty of a hype-dri­ven industry

The Kwon case is being watched close­ly as a sign of how aggres­sive­ly law enforce­ment will pur­sue those engaged in alleged­ly ille­gal activ­i­ties in the cryp­to space. Last month the Trea­sury Depart­ment issued sanc­tions on Tor­na­do Cash, which helps anonymize cryp­to trans­ac­tions, in a strong exam­ple of a crack­down on tech-based finan­cial tools.

But the pur­suit of indi­vid­u­als in cryp­to is much rar­er, and Kwon’s case could be a bell­wether for how oth­er projects that lost large sums of val­ue could be tar­get­ed in the courts — and if, even­tu­al­ly, some investors might claw their mon­ey back.

The 31-year-old Kwon grad­u­at­ed from Stan­ford Uni­ver­si­ty and briefly worked at Apple before return­ing to his home coun­try sev­er­al years ago to found a num­ber of cryp­to projects, includ­ing Luna. Before the spring crash, Kwon was hailed as a vision­ary and even attract­ed a cult of every­day fans known as “Lunatics.”

Cryp­to pulled off its big upgrade. Even larg­er ambi­tions await.

Nor was it just retail traders — Ter­raform also raised mon­ey from respec­tive financiers such as Sil­i­con Val­ley VC firm Light­speed Ven­ture Partners.

But in May a quick sell-off began for still-unclear rea­sons, prompt­ing the loss of more than $40 bil­lion in val­ue, accord­ing to analy­sis firm Ellip­tic, as the price of Luna plunged to near­ly zero and Ter­raUSD went from $1 to $0.11. The col­lapse helped trig­ger a broad­er cryp­to crash that affect­ed dozens of oth­er assets and companies. 

Bit­coin has gone from near­ly $40,000 to under $20,000 since the Ter­ra col­lapse, and the total mar­ket val­ue of cryp­to has plum­met­ed by more than a tril­lion dol­lars in just a few months.

Kwon made an attempt to relaunch Luna short­ly after, to the out­rage of many investors.

Law-enforce­ment experts said that they believed pros­e­cu­tion of the entre­pre­neur was pos­si­ble but chal­leng­ing giv­en the vagaries of cryp­to, with the line in the indus­try between fraud and risky invest­ment often blurry.

Trea­sury urges fed­er­al reg­u­la­tors to get tougher on cryp­to scams

“If some­one walks into a bank and holds it up for a lot of mon­ey with a video­tape of the whole thing, well that’s a pret­ty clear-cut case,” said William Calla­han III, a for­mer Drug Enforce­ment Admin­is­tra­tion spe­cial agent who now serves as direc­tor of gov­ern­ment and strate­gic affairs for a cryp­to com­pa­ny called the Blockchain Intel­li­gence Group. “Inves­ti­gat­ing and pros­e­cut­ing some­thing like this requires a much more unique set of skills.”

He said the case against Kwon would like­ly turn on whether it can be proved he know­ing­ly mis­led investors in stump­ing for the coins or was mount­ing a good-faith cam­paign for a risky-but-legal-venture.

Some evi­dence gath­ered by South Kore­an inves­ti­ga­tors so far, accord­ing to local media, includes alle­ga­tions that Kwon and oth­er Ter­raform exec­u­tives decid­ed to close their South Korea offices just a week before the cur­ren­cies crashed. Kwon has said the shut­ter­ing was long in the works.

On Sun­day the pur­suit of Kwon took a sur­re­al social-media turn when Kwon, out­spo­ken on Twit­ter, took to the plat­form to deny he is a fugitive.

“I am not ‘on the run’ or any­thing sim­i­lar — for any gov­ern­ment agency that has shown inter­est to com­mu­ni­cate, we are in full coop­er­a­tion and we don’t have any­thing to hide,” he post­ed.

But the Seoul pros­e­cu­tors quick­ly denied it. He is “obvi­ous­ly on the run,” the office said in a state­ment, accord­ing to local news media agency Yonhap.

Kwon quipped that he would only give away his coor­di­nates if “1) we are friends, 2) we have plans to meet 3) we are involved in a gps based web3 game.”



Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *