South Korea Tightens Grip on Embattled Terra Co-Founder Do Kwon

Do Kwon, whose Terraform Labs cryptocurrency ecosystem caused a digital asset collapse, may be forced to return to South Korea after officials sought to have his passport voided.

The prosecutor’s office said in a text message Thursday that a request to scrap the travel document had been sent to the country’s Foreign Ministry. If the ministry agrees, Kwon, who prosecutors say is in Singapore, would be required to return to Seoul within 14 days of receiving the notice of revocation.

The ministry acknowledged receiving the prosecutor’s request, stating that it “is taking necessary steps in accordance with relevant laws and regulations.”

The ministry previously stated that Kwon may be able to remain in Singapore without a passport. The latest developments come a day after a South Korean court issued an arrest warrant for Kwon and five others on capital-markets law violations.

After TerraUSD, also known as UST, collapsed from its dollar peg and brought down the ecosystem he had built, Kwon found himself at the epicenter of one of cryptocurrency’s biggest blowups. Along with the $60 billion loss, a related token called LUNA also crashed. The May collapse rocked confidence in the digital asset market, which hasn’t fully recovered from its losses.

According to Han Sang Jun, a lawyer at Daegun, some LUNA investors have complained to the local prosecutors, claiming Kwon committed fraud and illegal fundraising. Similar accusations were made in a complaint that LKB & Partners also submitted to South Korean prosecutors.

The Financial Services Commission, which oversees financial activity, said about 280,000 South Koreans are thought to have invested in LUNA. In an interview with cryptocurrency media startup Coinage, Kwon stated that he intends to work with authorities when the time comes.

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