Prosecutors in Seoul sent out a text message on Monday saying that Kwon had been given a Red Notice by the Interpol agency, the latest shameful chapter in the $2 trillion rout in digital assets that revealed enormously hazardous activities.

Kwon and five others have been charged with offences by South Korean authorities, including violations of capital-markets legislation. While it was known that Kwon had relocated from South Korea to Singapore this year to establish an office for Terraform Labs, the precise whereabouts of the man became murky when Singapore said on September 17 that he was no longer in the country. As a result, investigators from the prosecution have ramped up their search for him.

TerraUSD is an algorithmic stablecoin created by Terraform Labs, which also created the companion currency Luna. In May, both currencies crashed, sending the cryptocurrency market into a tailspin that was already weak from the Fed’s tightening of the money supply.

As of yet, digital assets have not recovered, and authorities across the world are examining the rubble for clues on how to prevent a repetition. Once-fervent support for cryptocurrencies in South Korea is gradually giving way to widespread contempt.

What Was Before Interpol Enter the Game

Three Arrows Capital was a successful cryptocurrency hedge fund until its demise in the wake of Terra’s fall and the larger market crash. Lenders and brokers including Voyager Digital Ltd. and Celsius Network Ltd. also felt the effects of the contagion.

After Kwon fled to Singapore, South Korean prosecutors filed an arrest order for him, citing circumstantial proof of flight. The fact that he was allegedly helping them was also disputed.

After TerraUSD failed, the Terra community was torn apart. Terra Luna Classic and TerraClassic USD are the renamed versions of the original tokens. Meanwhile, Kwon launched a second Terra chain, this time with a new Luna as its only token.

CoinGecko stats reveal that the new Luna cryptocurrency has lost 16% of its value in the past 24 hours. It seems that over 20% of Luna Classic has been lost. Even though TerraUSD has never regained its dollar peg, it is still traded on certain exchanges at an almost 14% discount.

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Kwon relocated from South Korea to Singapore, which is home to Terraform Labs, the stablecoin issuer he co-founded but which has since gone out of business.
Police in Singapore announced Saturday that he is not in the country at the moment.

As of Monday, prosecutors in South Korea said that there was “circumstantial evidence of escape” after he departed Singapore.
The media site said that prosecutors had refused to comment on whether they had any information on Kwon’s location or if they planned to alert the international police organization Interpol.

Kwon was arrested last week on suspicion of breaking the Capital Markets Act, along with several other suspects who were thought to be in Singapore.

What Happened to Terra Before This?

On Saturday, Kwon tweeted his defense, claiming he was not hiding from the law and that they are in the process of defending themselves in many jurisdictions. They have held themselves to an exceptionally high standard of integrity, and look forward to revealing the facts over the coming several months.

Three cryptocurrency firms went bankrupt and the value of all cryptocurrencies dropped by approximately $45 billion (€45 billion) in May when Terra’s UST and sibling LUNA coins crumbled.

After a precipitous decline in early May, Terra relaunched its token, Luna, in late May without the stablecoin UST, which many believe to be the primary reason for the decline.

In spite of this, the crypto market was shaken by the arrest warrant announcement, and the Luna token dropped more than 16% on Wednesday (September 14).

In the midst of the extreme volatility of the cryptocurrency market, stablecoins provide a degree of stability.
Typically, they keep a 1:1 exchange rate with the US dollar since that is the fiat currency to which they are pegged.

By contrast, Terraform Labs’ UST was an algorithmic stablecoin; rather than using a cash or asset reserve to back its token, UST relied on a sophisticated combination of code and Luna to ensure the stability of the system.

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Do Kwon Directs Ecosystem

Terra founder, Do Kwon made crucial announcements about future of Terra ecosystem and their tokens in the Twitter Space. This space was hosted by Udi Wertheimer. It is among these announcements that has to do through inclusion of the new mechanics of token that take in consideration few kinds of bitcoin in Terra ecosystem. In such aspect, Kwon announced that Terra is working for bringing some kind of tokenized bitcoin to Terra blockchain. It is in most decentralized form.

However, Do Kwon even explained that with inclusion of the bitcoin, UST will become the hybrid stablecoin. It allows the users to exchange almost $1 worth of the UST for $0.99 Bitcoin. This will also effectively permit the users to redeem through using UST with 1% premium. It is almost in same way that the LUNA mainly used. Kwon has also clarify that such mechanics would explained in near future with complete detailed way.

Explosion of Bitcoin

Kwon even expects the new version of tokenized in Terra ecosystem. It is for becoming the de facto of the reserve currency of various protocols that are built on the top of chain. This is about expanding to be a part of smart contract application which holds the treasury. Kwon also announced few numbers about the bitcoin Terra would buy in short term. However, terraform stated that company has the budget of buying $3 billion of bitcoin in short term. It announced that many of the bitcoin not bought yet.

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