The creator of Luna and Terra coins, Punchy, is wanted in connection with a $40 billion currency failure.
Do Kwon, the cryptocurrency founder behind tanking Luna and “stablecoin” TerraUSD currencies, is now being sought by Interpol following arrest warrants issued earlier this month.
On September 19, the Seoul Central District Court ordered local officials to arrest Kwon and five others on South Korea’s fraud charge. All six were thought to be staying in Singapore at the time. According to media reports, Singapore police believe Kwon has departed the country. Interpol recently issued a “red notice” requesting that law enforcement agencies all over the world find and detain Kwon.
Kwon tweeted three days after the South Korean warrant to reassure his innocence, saying that he was “not ‘on the run or anything similar” and that he was “in full cooperation and we don’t have anything to hide.” However, it has been over a week since his last public tweet.
The next day, South Korean prosecutors announced that Kwon was “evading” and not Information about Do Terraform requested by the SECSouth Korean prosecutors said the next day that Kwon was “obviously on the run” and not cooperating with their investigation. Prosecution sources told South Korea’s Yonhap News Agency that Kwon’s attorney told prosecutors that Do Kwon would not appear for questioning. Kwon and Terraform Labs are also under investigation by the US Securities and Exchange Commission.
Do Kwon’s company Terraform Labs raise over $200 million from notable investment firms to construct projects based on Luna, a cryptocurrency? These projects would also include TerraUSD, an “algorithmic stablecoin” linked to a US dollar’s value. Rather than storing cash reserves, bonds, or other assets, “TerraUSD automatically traded Luna in order in case it’s a peg.
In early 2021, the price of Bitcoin plummeted to $116. The Luna Foundation Guard, a nonprofit established by Kwon to protect Luna and TerraUSD against market volatility, would acquire $3.5 billion worth of bitcoin for keeping in the organization.
It didn’t go as planned. During a severe sell-off in early May, Terra’s price fell to just pennies, while Luna plummeted from $80 to less than 2 cents. The Guard of the Luna Foundation sold and dispersed almost all of its 80,000 bitcoins, saving only about 300 to reimburse investors. The organization denied allegations that it bailed out large “whale” investors with the coins, though it never provided evidence.
The $40 billion Luna/Terra ecosystem’s near-total collapse in early May 2022 was the last straw for many investors, and a broader $300 billion sell-off of crypto assets ensued.
On “crypto Twitter” and within the decentralized finance community, Kwon has earned a reputation as an egotistical, belligerent guy. He gave his daughter Luna her name, his cryptocurrency’s name. He frequently dismissed critics by calling them “poor,” including a British economist who had reservations about the stability of Terra amid a sell-off. Kwon announced publicly that he intended to relaunch Terra 2.0 after the failure.
