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Crypto developer Do Kwon says he is 'not on the run'

September 18, 2022

Do Kwon had founded cryptocurrencies Terra and Luna, whose collapse wiped out billions of dollars for his investors. He is now a wanted man, and his location remains unclear.

Logo der Kryptowährung Terra Luna
Stablecoin Terra and its sister token Luna crashing in May this year, sending shockwaves across the crypto universeImage: Silas Stein/dpa/picture alliance

Wanted crypto developer Do Kwon, who was the primary developer of two cryptocurrencies, said he was not on the run after Singapore police revealed that he was out of the island state. 

The 31-year-old Korean national has been accused of fraud by investors after the  crash of his cryptocurrencies Luna and TerraUSD, which wiped out over $40 billion of investors' money earlier this year. 

On Wednesday, a South Korean court issued an arrest warrant for Do Kwon. Kwon was believed to be in Singapore, which is where he gave his first media interview since the collapse of his venture in May this year. But the Singapore Police Force (SPF) said he was "currently" not in the country.

"SPF will assist the Korean National Police Agency (KNPA) within the ambit of our domestic legislation and international obligations," they said in a brief statement in response to a query by the AFP news agency. The police force did not provide further details.

Crypto market a 'pessimistic place' for investors

Local reports suggest that Kwon's work permit in Singapore was set to expire on December 7, but a renewal may now be at risk.

Kwon says he is ready to cooperate

On Sunday, Kwon said he and his organization were ready to fully cooperate with law enforcement.

"I am 'not on the run' or anything similar", Kwon said in a statement on Twitter early Sunday. He did not reveal where he was, but insisted that "we don't have anything to hide." 

"We are in the process of defending ourselves in multiple jurisdictions... and look forward to clarifying the truth over the next few months," he added.

What happened to Terra and Luna?

South Korean prosecutors have also issued arrest warrants for five other people, in addition to Kwon – all linked to stablecoin TerraUSD and its sister token Luna.

While stablecoins are generally designed to have a stable price and pegged to a real-world commodity, TerraUSD was algorithmic, and used code to maintain its price at about one US dollar.

In May, the Terra/Luna system disintegrated with the collapse of Terraform Labs, and the price of both tokens took a nosedive to near zero. The fallout hit the wider crypto market, sparking more than $500 billion in losses.

With many investors losing their life savings during the collapse, the South Korean authorities have opened several criminal probes into the crash.

see/dj (Reuters, AFP)