A South Korean court has issued an arrest warrant for Kwon Do-hyeong, the co-founder of Terraform Labs, the developer of the cryptocurrency Terra and Luna. With CEO Kwon currently in Singapore, the Interpol red notice process is expected to continue.
According to reports, an investigative team of five prosecutors from the Seoul Southern District Attorney's Office recently entered the Seoul Southern District Court with Representative Kwon and issued arrest warrants for officials living in Singapore, including Terraform Labs founding member Nicholas Platias and employee Han Mo.
The main charge against them is a violation of the Capital Markets Act. Prosecutors are known to consider cryptocurrencies Terra and Luna to be “investment contract securities” under the Capital Markets Act. Investing in contract securities are securities in which money is invested in a common project with the hope of making a profit and receiving payment on the result, as he is rumored to have done so.
Currently, all key members of Terraform Labs, including CEO Kwon, remain in Singapore. In a recent media interview, Kwon said it was difficult to make a decision to return to South Korea and said he had never contacted South Korean investigators. Under the warrants, which are valid for one year, prosecutors are said to plan to secure new recruits through measures such as Interpol's red notice and passport invalidation.
Luna’s cryptocurrency market cap climbed to around the top 10 globally at one point, but its price plummeted 99% in a week or so around mid-May. Investors sued Kwon et al. for violating the Fraud and Similar Receipts Regulations under the Special Offers Act.
