July 21, 2024


South Korean publication KBS reports that Terra LUNA CEO Do Kwon is currently living in Europe, despite having his passport invalidated by South Korea’s foreign ministry.

Kwon had reportedly fled to the unknown European location via Dubai before his passport was invalidated.

Kwon ignores foreign ministry request

The revelation of Kwon’s alleged whereabouts comes almost a month after Seoul’s foreign ministry said that Kwon had two weeks to return his passport. If he didn’t comply, they would revoke the passport. Accordingly, the move would have forced Kwon to return to South Korea and face charges of capital markets law violation, together with several other employees of Terraform Labs.

Earlier this year, South Korean prosecutors of the Seoul Southern District launched a global manhunt for Kwon after the $40 billion collapse of the TerraUSD stablecoin and its sister token, LUNA, in May 2022. 

TerraUSD was an algorithmic stablecoin. This means it didn’t rely on a reserve of assets to maintain a value of $1. Instead, it depended on algorithms, trading incentives, and a supply-and-demand relationship with LUNA. Traders could earn up to 20% annual percentage return (APR) by investing TerraUSD in Terraform Labs’ crypto bank, Anchor protocol.

Upon request from South Korean officials, Interpol has issued a Red Notice for Kwon, which is not an international arrest warrant. Rather, it allows law enforcement in one of Interpol’s 195 member countries to provisionally arrest an individual for extradition, surrender, or another legal action.

Kwon manipulated the price of LUNA

According to KBS, South Korean prosecutors have secured evidence that Kwon manipulated the price of LUNA. They obtained access to a conversation between Kwon and a former Terraform Labs employee. In the discussion, Kwon ordered the employee to participate in the manipulation.

“I can’t reveal the details, but it was a conversation history where CEO Kwon specifically ordered price manipulation,” said a South Korean prosecution official.

Previously, a representative for Kwon had denied these allegations.

Kwon brags about “creative period”

Still, Kwon seems relatively unfazed and has continued to write code for the Terra 2.0 blockchain. After the collapse of the original ecosystem, he launched Terra 2.0 as a fork of the original network. The new blockchain has new LUNA and TerraUSD tokens, while the old chain’s tokens have been rebranded as LUNC and USTC.

On Nov. 3, 2022, Kwon said that he had had an unprecedented opportunity for creative expression in recent weeks:

According to a thread by Bybit researcher IAN, Kwon has proposed an idea to reduce the engineering overhead of launching a layer one blockchain. The idea proposes making the launch as easy as deploying a smart contract. Additionally, the Terra CEO has also put forward ideas for improving the security of L1s using “interchain alliances.” 

Kwon had previously denied being on the run, saying that he and Terraform Labs had nothing to hide.

Later, in Oct. 2022, he claimed in an interview on the Unchained podcast that those leveling charges against him had a political agenda and apologized to Terra’s bereft investors.

Terra LUNA
Source: TradingView

Amidst Do Kwon’s evasions, LUNC is currently trading at $0.00022148. It has not recovered significantly from the collapse earlier this year. On the other hand, LUNA is trading at $2.40 and is down 87% from its all-time high.

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