Court issues an arrest warrant against Terra’s Do Kwon as LUNA nosedives 40% in 2 hours

Four months after the widely-publicized collapse of the Terra (LUNA) platform and its TerraUSD (UST) stablecoin that initiated a chain reaction across the cryptocurrency market, the CEO of Terraform Labs is facing arrest, along with a handful of other individuals.

Indeed, a court in the South Korean capital has issued a warrant for Do Kwon and five additional persons, citing violations of the country’s Capital Markets Act, according to a text message from the prosecutor’s office, Bloomberg’s Hooyeon Kim, reported on September 14.

The Financial Crimes Unit of the Supreme Prosecutors Office said that the six are in Singapore.

The timeline of the collapse

As a reminder, Terra’s co-founder is facing allegations of fraudulent activities after the devastating $45 billion crash of the Terraform Labs ecosystem that started a series of unfortunate events devastating the entire crypto sector.

In May, Do Kwon was accused of fraud in a series of tweets by a person known only by their handle FatManTerra, a familiar whistleblower in the crypto industry and a member of the Terra Research Forum.

Later, in July, the authorities issued a “notice upon arrival” for Do Kwon and travel restrictions for Terraform Labs co-founder Daniel Shin, along with raiding Shin’s home as part of the intensifying investigation into the platform’s collapse and suspicions of fraud. 

In mid-August, Do Kwon reportedly sought the assistance of lawyers from a domestic law firm to help him prepare a defense in anticipation of the possible legal case against him and his colleagues, as Finbold reported.

LUNA price analysis

Meanwhile, the crypto sector is still trying to recover from the aftershocks of the Terra implosion, with the LUNA coin itself nosediving more than 40% in only two hours, from $4.1928 to $2.4964.

At press time, the decentralized finance (DeFi) token’s market cap stood at $367.27 million, according to the data retrieved from CoinMarketCap.