The news has already stirred the crypto ecosystem with many of the affected holders of LUNA yet to recover their losses.
Do Kwon, the co-founder of Terraform Labs has been reportedly arrested in Montenegro, months after he vanished after the implosion of Terra (LUNA) and its algorithmic stablecoin UST. The arrest of Do Kwon was shared through a Tweet from Filip Adzic, the country’s minister of interior.
At a time over the past year, Do Kwon was declared one of the most wanted men in the world with the Interpol issuing a RED NOTICE for his arrest. Authorities in South Korea, Singapore, and even the United States states have opened a direct investigation into Terraform Labs and the activities surrounding the collapse of the first iteration of the LUNA.
The depegging of UST was the birth of the yet-to-be-cleared crypto winter that has continued to plague the digital currency ecosystem. With the collapse at the time, the estimated loss was pegged at around $40 billion as the market capitalization of LUNA was wiped out. LUNA, was on track at the time to be ranked one of the top 10 biggest cryptocurrencies in the world.
Per Adzic’s tweet, the identity of the arrested individual is yet to be fully ascertained despite the assumption that it was Do Kwon.
“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs,” Adzic said in a tweet according to Google translation of his words. The minister added that;
“The former “cryptocurrency king”, who is behind losses of more than 40 billion dollars, was detained at the Podgorica airport with falsified documents, and South Korea, the USA and Singapore are demanding the same. We are waiting for official confirmation of identity.”
The news has already stirred the crypto ecosystem with many of the affected holders of LUNA yet to recover their losses.
Aftermath of Do Kwon’s LUNA Collapse
The collapse of both LUNA and UST was signaled as one of the core mishaps that led to the bankruptcies of some of the dominant startups in the industry. The first firm to implode was crypto lender Celsius Network, while hedge fund Three Arrows Capital (3AC) and brokerage firm Voyager Digital also went down the rabbit hole last year.
The broad interconnectedness of the events behind the collapse of the blockchain protocol also lead to the FTX Derivatives Exchange filing for bankruptcy late last year. The connection and exposure to LUNA also dragged Genesis Trading, a subsidiary of the Digital Currency Group (DCG) which filed for bankruptcy earlier this year.
While these events are the direct aftermaths of the LUNA implosion, the broad event has also stirred intense scrutiny from regulators and lawmakers around the way. From that time to date, a number of regions including Japan have revamped their laws associated with stablecoins as many sought avenues to protect customers more.
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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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