Following an ongoing investigation into the collapse of the Terra ecosystem, a court in Seoul issued a warrant for Do Kwon, the CEO and CEO of TerraForm Labs. According to a new statement, the warrant was reportedly issued in relation to a violation of capital market regulations and targeting five additional people who are currently living in Singapore. Terraform Labs'' algorithmic stablecoin UST and its sister token LUNA imploded dramatically in May this year, resulting in the elimination of at least $40 billion (
According to a study by Bloomberg, a court had issued arrest warrants for the Terra founder and five others. According to a statement, Kwon and his accomplices were allegedly violating Korean capital markets law. According to a text message, the prosecutor''s office has issued arrest warrants.
The cryptocurrency''s ecosystem started monday when investors lost confidence in the dollar peg of the network''s UST stablecoin. Since UST was not backed by real dollars and had its value through an algorithmic relationship with LUNA, the loss of confidence resulted in a death spiral which reduced the prices of LUNA and UST to tens of thousands of dollars.
Terra''s collapse has prompted inquiries from the US Securities and Exchange Commission (SEC) and Korean regulators as well as several class-action lawsuits.
In July, South Korean officials raided at least seven cryptocurrency exchanges in connection with investigations into Terraform Labs. Kwon and his firm are accused of defrauding investors and claiming that the company was operating a Ponzi scheme.
Terra 2.0, the blockchain that Kwon Labs launched following the collapse of the original Terra blockchain, has been badly impacted as a result of the release of arrest warrants. The native LUNA token from the network has dropped by more than 36 percent in the last 24 hours.
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