It’s starting to sound like a cat and mouse game. And it’s a bad outlook for the cryptocurrency industry.
Do Kwon, founder of Terraform Labs, the ecosystem whose original tokens were Luna and UST (also known as TerraUSD), appears to be amused by the statements of the authorities looking for him and accusing him of fraud.
Kwon, a South Korean national, is the focus of an investigation by local authorities seeking to shed light on the collapse of Luna and UST last May. This defeat swallowed up at least $55 billion and caused what would then become an unprecedented liquidity crisis in the cryptocurrency industry.
Hedge fund Three Arrows Capital, or 3AC, has been forced into liquidation, while leading lenders and cryptocurrency platforms have been forced to file for Chapter 11 bankruptcy protection.
The list of victims includes Celsius Network and Voyager Digital, as well as thousands of small investors who are currently gathering on social networks in the hope of getting a fraction of their investment back.
red notice
South Korean authorities recently issued an arrest warrant for Kwon. On September 27, they added that they contacted the global law enforcement agency Interpol, which for its part issued a so-called red notice for Kwon.
The agency said the Red Notice is a request to law enforcement agencies around the world to locate and temporarily detain a person pending surrender, surrender or similar action in accordance with the law.
Notifications are usually issued on fugitives. They are issued by INTERPOL at the request of a member state and must comply with the statute and rules of the organization.
“The Red Notice is an international wanted persons notice, but it is not an arrest warrant,” the agency says.
Singapore police said Kun, who was in Singapore when South Korean authorities issued their arrest warrant, is no longer in the city-state. This prompted the South Korean authorities to say he was a fugitive. At the time, Kwon disputed this statement, denying that he was a fugitive.
“Come visit”
Nine days later, Kwon responded on Twitter to a user who asked him where he was hiding: “I’m writing code in my living room.” (HBU is “how ‘about you?”)
“Watching to break a cigarette and own a cigarette,,, you may have a line or two depending on market conditions. Did you take long profits last night with me, brother?” The user responded indicating the fall of the British pound.
โWe missed this,โ Kwon said sarcastically. “Visit us, we’ll share your cigarette soon!”
Kwon’s Twitter bio continues to say he is in Singapore, despite statements from Singapore police claiming he is not in the city-state.
In an exchange with another Twitter user, Kwon said that no red notice has been issued to him.
โFor something notified by name, it definitely gives no notice. Tried looking for it here, found nothing: https://interpol.int/en/How-we-work/Notices/View-Red-Notices,โ he said. .
At the time a user pointed out to him that his responses intended to ridicule the authorities were arrogant.
Kwon replied, “I’m only passing on the results of a publicly available Internet search query. I’m not sure what part of that conveys arrogance.” “Perhaps observer bias?”
Where is Do Kwon?
When another Twitter user points out that people can locate him based on his Twitter connections, Kwon seems to agree.
“Yeah like I said I don’t make any effort to hide. I go for walks and malls, by no means have I come across no one from CT in the past two weeks,” he said.
In all of these conversations with users on Twitter, which appear to show that he is defying the authorities, Kwon never mentioned his exact whereabouts.
According to Singapore’s Straits Times, Kwon has a Singapore work permit – an employment permit – that expires on December 7. His application for renewal is under review, but he is said to be in danger as South Korean authorities have moved to invalidate his passport to force him to return to the country.
The Straits Times reported that Kwon had already rejected an application for a permit allowing foreign entrepreneurs to start and operate a business in Singapore.
first domino
Luna and UST were the first dominoes to collapse in what would later turn into a liquidity crunch for the crypto sector.
The two distinct symbols collapsed after the underground treasuries lost their peg to the dollar, the basis of its qualification as a stable currency. These cryptocurrencies are linked to more stable assets, such as the US dollar or gold. From May 9 to May 13, at least $55 billion of market capitalization disappeared, causing many investors to suffer huge losses.
Underground treasuries were an algorithmic stablecoin, which was backed not by dollar reserves but by its sister asset, the Luna. Algorithmic stablecoins differ from centralized alternatives such as Tether or USD, which are backed by physical dollars or equivalent assets stored in a bank.
Last June, Terraform Labs employees reportedly told the US Securities and Exchange Commission that Do Kwon was cashing out $80 million a month before the collapse of UST and Luna Tokens.
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