South Korean Officials Crack Down Harder on Do Kwon, Ask Him To Return His Passport

On September 14, South Korean prosecutors issued an arrest warrant for Do Kwon for violating the country’s capital markets laws. About a week back, the authorities disclosed that they had asked two cryptocurrency exchanges to freeze more than $60 million worth of Bitcoin associated with Do Kwon.


Now, in the most recent development, Do Kwon may lose his South Korean passport as authorities look to intensify the pressure on the absconding co-founder. Notably, the authorities have persuaded Do Kwon to return home and face the charges against him related to the $60 billion crash of the Terra ecosystem.

Even Interpol has been trying to track Do Kwon, but his whereabouts are still unknown. 

The South Korean authorities have asked for his passport back, or else it shall be revoked in approximately two weeks.

Terra’s collapse was a setback for the investors, leading to significant wealth depletion. It has caused several cryptocurrency firms and exchanges to go bankrupt as well. Because of this, Do Kwon, along with five other people, has been accused of violating South Korea’s capital markets law, along with five other people.

Do Kwon Denies Speculations Against Him

Recently, some reports suggested that the South Korean prosecutors froze $39.6 million worth of Do Kwon’s crypto asset holdings. In other news, the Luna Foundation Guard had apparently transferred 3,313 Bitcoin to crypto exchanges KuCoin and OKX. Following this, the Terra founder denied the charges, calling them “baseless.”

In his recent tweets, Kwon stated: “I don’t get the motivation behind spreading this falsehood – muscle flexing? But to what end? Once again, I don’t even use Kucoin and OkEx, have no time to trade, no funds have been frozen. I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.”

He also spoke against the South Korean authorities, saying: “It’s no surprise that crypto is most popular in countries that weaponize state institutions against their own people for political gain. Reap what you sow – revolutions start from within.”

It is important to note that Do Kwon had stated earlier that he would cooperate with the authorities in the case of an investigation regarding the Terra Collapse. However, if the officials and authorities are to be believed, he is not cooperating in the least and has still not made his location known.

Terraform Labs Backs Do Kwon

The company behind the development of the Terra blockchain – Terraform Labs, said South Korea’s case against the co-founder Do Kwon has become political in nature. 

The Terra spokesman alleged the prosecutors of expanding the definition of security given the intense public pressure from the collapse of Terra and its connected algorithmic stablecoin TerraUSD (UST), now known as TerraUSD Classic (USTC). The argument by Terraform Labs took birth from the unclear regulatory status of cryptocurrencies and the companies that create and eventually issue them.

In response to the arrest warrant against Kwon, Terraform Labs laid out a defense arguing Terra isn’t legally security, which indicated that capital markets laws don’t cover it.

Photo of Qadir AK
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