Interpol issues red notice for Terra co-creator behind $40 billion crypto crash

Terraform Labs CEO Do Kwon
(Image credit: Woohae Cho/Bloomberg via Getty Images)
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11 days ago South Korea issued an arrest warrant for Do Kwon, who is the co-founder and CEO of Terraform Labs and one of the individuals most entwined in this year's widespread crypto crash. The Terra ecosystem's collapse was the domino that sent plenty of others tumbling, including the linked Luna token (fans of which termed themselves 'Lunatics'), and Do Kwon and five others involved have subsequently relocated to Singapore.

This may have been because Singapore has no extradition treaty with South Korea, which could have meant a long and potentially tricky legal process. On the other hand, scratch that, because Interpol has now issued a red notice for Do Kwon. This essentially means that every police force in the world is being asked to locate and arrest him. 

A spokesperson for South Korean prosecutors confirmed the red notice to Techcrunch, which was issued following their request. Kwon meanwhile is tweeting out very innocent lines like "you have no business knowing my gps coordinates" to the world.

"I am not 'on the run' or anything similar—for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide," Do Kwon wrote on September 17. Presumably while packing an overnight bag.

"We are in the process of defending ourselves in multiple jurisdictions—we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months."

No doubt Do Kwon will be handing himself in to the nearest police station as we speak. The interesting element to this, should Do Kwon be arrested and face trial, is what level of criminal liability he may or may not hold for a market crash that he had no real interest in—Do Kwon's life's work imploded more-or-less overnight and he went from lauded crypto king to being accused of being a scammer or worse.

This is a pat summation but South Korean authorities will have to untangle whether Do Kwon is the fool, or those who followed him. The collapse of Do Kwon's TerraUSD, a so-called stablecoin, also took down the Luna token, which in turn led to the collapse of other crypto firms, because everything in crypto is interlinked. Estimates vary but Terra's collapse has been said to have wiped out and eye-watering $40 billion worth of value. If we avoid the temptation to dunk on Do Kwon as a comedy crypto villain for a moment and step back, it's worth asking whether a contagion like that can be pinned on one individual.

As well as South Korea, the crypto collapse has attracted the attention of US regulators, so the fun is only just starting for Do Kwon and friends.

The Interpol red notice is becoming something of a stock response to crypto types trying to flee the consequences of their actions: Interpol similarly issued one for Faruk Fatih Özer, the founder and CEO of the now-defunct crypto exchange Thodex, who had fled to Albania after a $2.5 billion rug-pull. Özer is now in Turkish jail awaiting trial with prosecutors asking for 40,564 years. On the bright side, with good behaviour he'll be out in half that.

I have to admit that Do Kwon's currently pinned tweet does tempt a smile. He's not on the run, remember. "Tbh haven't gone running in a while, need to cut some calories."

Rich is a games journalist with 15 years' experience, beginning his career on Edge magazine before working for a wide range of outlets, including Ars Technica, Eurogamer, GamesRadar+, Gamespot, the Guardian, IGN, the New Statesman, Polygon, and Vice. He was the editor of Kotaku UK, the UK arm of Kotaku, for three years before joining PC Gamer. He is the author of a Brief History of Video Games, a full history of the medium, which the Midwest Book Review described as "[a] must-read for serious minded game historians and curious video game connoisseurs alike."