Luna crypto drops by almost 50% after Seoul court issues arrest warrant for Terra co-founder

South Korean authorities have issued a warrant of arrest for Do Kwon, co-founder of Terraform Labs, which saw the collapse of its $40 billion crypto ecosystem earlier this year. News of the arrest negatively impacted the price of the new Luna token and sent it plunging by almost 50 percent.

Timeline of Terra-luna-v2

The entire crypto community was carefully watching the event of Terra Classic [LUNC]'s unprecedented surge over the last few weeks. Several developments happened in the Terra ecosystem that have the potential to change its fate for good.

A court in South Korea has issued an arrest warrant against Do Kwon, the co-founder and CEO of now-defunct stablecoin issuer Terraform Labs. The court also issued a warrant against five other members of the company, a local media outlet reported on Wednesday.

According to local reports stemming from South Korea, the country's foreign ministry is looking to invalidate the co-founder of Terraform Labs Do Kwon's passport. The story was published the day after it was reported that Seoul's Southern District Prosecutors Office issued a warrant for Kwon's arrest.

A court in South Korea is issuing an arrest warrant for Terraform Labs founder Do Kwon following the collapse of the cryptocurrency Terra (LUNA) and algorithmic stablecoin TerraUSD (UST).

Following an ongoing investigation into the spectacular implosion of the Terra ecosystem, South Korea's Ministry of Foreign Affairs wants to void the passport of Do Kwon, the co-founder of the now-defunct Terraform Labs.

Do Kwon, the founder of Terra LUNA Labs might have to return to back to Seoul after the South Korean government's significant declaration. However, Terra Head has been held responsible for triggering the collapse of the global crypto market.

A warrant for the arrest of Do Kwon and five others has reportedly been issued by prosecutors in South Korea. The prosecutors allege that Kwon and his co-accused violated the country's capital markets law. In addition to the arrest warrant, prosecutors will reportedly request an Interpol red notice for the Terraform Labs chief executive officer.

Due to the South Korean government's request for his arrest, Do Kwon, the founder of Terraform Labs, is in grave danger. The cryptocurrency market lost $40 billion as a result of Terra's stablecoin USTC and Terra Classic LUNC collapsing.

According to a report from a local news media, law enforcement agencies in South Korea issued an arrest warrant against LUNA Founder and Terraform Labs CEO Kwon Do-Hyeong also known as Do Kwon. The founder has been under authorities' radar since the collapse of the Terra ecosystem in May 2022.

Do Kwon, the maligned founder of Terraform Labs, has been issued an arrest warrant by South Korean authorities on breaches to capital markets law. According to Bloomberg, the Seoul courts issued a warrant for Do Kwon and five others, all of whom currently reside in Singapore.