As per Inner City Press, a meeting between the prosecutors and Kwon’s lawyers took place in the US District Court for the Southern District of New York before Judge Paul Engelmayer. The judge indicated his consideration of the GENIUS Act, which could potentially influence the securities fraud charges against Kwon.

The GENIUS Act, an acronym for Guiding and Establishing National Innovation for US Stablecoins, cleared the US Senate on June 17. However, it awaits a possible vote in the House of Representatives before a decision from US President Donald Trump on its enactment.

The legislation, which aims at regulating payment stablecoins, might impact Kwon’s charges related to the TerraUSD (UST) algorithmic stablecoin and LUNA, the platform’s token. In 2022, the UST by Terra significantly deviated from its peg to the dollar, leading to a system-wide crash. This event sparked legal action against Kwon and other executives by authorities in the US and South Korea.

In 2023, Kwon was arrested in Montenegro on unrelated charges. After several court delays, he was extradited to the US in December to stand trial on nine felony counts, including securities fraud, commodities fraud, and more. Kwon has maintained his innocence throughout and is being held without bail. His criminal trial is projected to start in January 2026.

In a separate civil case in 2024, Terraform Labs and Kwon were found guilty of defrauding investors by a jury. Judge Engelmayer is considering if the civil case rulings will have any bearing on Kwon’s ongoing criminal case.

The GENIUS Act, after passing the Senate, is currently under consideration in the House of Representatives. Its companion bill, the STABLE Act, is also under review. These bills may significantly reshape how US financial regulators and authorities approach digital asset-related cases.

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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.

The post Wanted Do Kwon Denies Fleeing Terra Crypto Probing appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

Terra (LUNA) blockchain developer Terraform Labs (TFL) has gifted the Luna Foundation Guard 10 million LUNA worth around $820 million at current prices.

The Luna Foundation Guard (LFG) is a nonprofit organization using the Terra. This charity based organization is tasking and collateralizing the network’s algorithmic stablecoin Terra USD (UST). The purpose is to keep it pegged with the U.S. dollar.

Moreover, Terraform Labs’ latest announcement came via Twitter on April 14. However, it did not outline what the funds would go towards specifically. The transaction data from Terra Finder shows that 7.8 million LUNA (roughly $630 million) was promptly transferred out of the LFG’s reserve wallet yesterday.

In addition, Some additional Avalanche (AVAX) tokens could be on the shopping list as well. Considering both TFL and LFG purchased $100 million worth of AVAX last week.

Following Terra’s recent (and ongoing) Bitcoin (BTC) buying spree, which includes the purchase of roughly 2,500 BTC ($100 million). So only two days ago, the wallet belonging to LFG became the 3rd largest holder of digital gold globally. It has a tail behind MicroStrategy and Tesla.

The latest donation to the LFG comes just over a month since Terraform Labs gifted $1.1 billion worth of LUNA, and it could be burnt to mint UST and grow its reserves.

According to the LFG’s accounting records, its total reserve balance stands at $2.44 billion at the time of writing. Along with the BTC representing around 70% of that figure at $1.71 billion.

Despite all of the bullish developments with Terra of late, the price of LUNA is down 7% over the last 30 days to sit at $81.65 at the time of scripting

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