According to the Financial Crimes Unit of the Supreme Prosecutors Office, a South Korean court has issued an arrest warrant for Do Kwon, a co-founder of the now-defunct stablecoin issuer Terraform Labs. According to a report, the warrant also names five additional people.

Investigations against Terraform Labs, its founder Do Kwon, and other connected parties have been conducted by regulators all across the world. Earlier this year, investors suffered enormous losses as Terra [LUNA] and its native stablecoin UST lost the majority of their value. The market grew turbulent as a result of the same having an impact on a larger ecosystem.

They are charged with violating the Capital Markets Act

This year’s crypto winter began with the $40 billion Terra ecosystem and its algorithmic stablecoin (UST) collapsing, and the warrant was issued four months after that. It was the first domino to fall in that period.

The ensuing contagion had a devastating effect on the whole industry, leading to the collapse of businesses like Celsius Network and Voyager Digital as the value of digital assets fell by more than 50% from their respective highs.

Following the disclosure of the amount of its exposure to the Terra ecosystem, the Singapore-based hedge firm Three Arrows Capital became the most recent organization to declare bankruptcy. 

In the crypto business, the collapse of Three Arrows created a path of destruction and bad debt, with billions due to creditors.

Kwon has remained adamant that he is cooperating with the authorities during his first public interview last month. The request for comment received no immediate response from Terra. Kwon also reaffirmed his dedication to the Terra ecosystem and its recently relaunched Terra cryptocurrency (LUNA). In the last hour, the token’s value has dropped by 16.7%.

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