Cryptocurrency

South Korean founder of failed cryptocurrency Terra denies he is ‘on the run’ | Cryptocurrencies

Do Kwon, the South Korean founder of the failed cryptocurrency Terra wanted by police, has denied he was on the run after Singapore investigators said he was not in the city-state as had been believed.

Kwon’s whereabouts have been thrown into question after a statement from Singapore police late on Saturday, and his tweets did not reveal where he was.

The collapse of Terraform Labs earlier this year wiped out about $40bn of investors’ money. Kwon has been accused of fraud by five investors based in South Korea; he is being investigated by a financial crimes unit and in the US by the Securities and Exchange Commission.

A South Korean court on Wednesday issued an arrest warrant for Kwon.

Early Sunday he said on Twitter: “I am ‘not on the run’ or anything similar”, but did not reveal where he was.

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

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

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

Late on Saturday, the Singapore police force said 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 Straits Times newspaper has reported that Kwon’s work permit in the city-state was due to expire on 7 December, but his application for a renewal could be at risk now.

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 Terra/Luna system disintegrated in May, with the price of both tokens plummeting to near zero, and the fallout hitting the wider crypto market. Its collapse sparked more than $500 bn in losses.

Stablecoins are designed to have a relatively stable price and are usually pegged to a real-world commodity or currency.

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

Many investors lost their life savings when Luna and Terra entered a death spiral, and South Korean authorities have opened multiple criminal probes into the crash.

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