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Interpol issues red notice for Terra's founder Do Kwon

After the collapse of stablecoin Terra, Do Kwon has been missing.

a person sitting in a chair holding a cup

Do Kwon in Seoul in April. Photographer: Woohae Cho/Bloomberg

South Korean law enforcement said Interpol have issued a red notice to locate and arrest Terraform Labs co-founder Do Kwon who faces charges related to the collapse of stablecoin Terra in May, according to Bloomberg.

On Monday, prosecutors in Seoul revealed in a text obtained by Bloomberg that the international police organization had issued a Red Notice for Kwon, launching a worldwide attempt to find the former crypto executive. 

In May, stablecoin Terra – crypto pegged one-to-one to the dollar – depegegged, leading to a loss of $40bn dollars. The impact of Terra's collapse leads to a $600bn loss across the crypto industry. Terraform labs was behind the Terra stablecoin and its sister token Luna. 

Earlier this year, Kwon moved from South Korea to Singapore, where he maintains a residence, but his location has become unclear after the city-state on Sep 17 said he no longer lived there. 

In response, Kwon tweeted that he was not "on the run" and that he and Terraform labs were in "full cooperation" with regulators.

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 🌕 (@stablekwon)

Kwon has yet to state his whereabouts or plans on Twitter, but before the Red Notice, Kwon said that Terraform Labs was "defending ourselves in multiple jurisdictions". 

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

— Do Kwon 🌕 (@stablekwon)

Terra's collapse, in tandem with the crypto market's downturn, has led mainstay projects to file for bankruptcy. Hedge fundThree Arrows Capital and crypto lenders such as Voyager Digital Ltd and Celsius Network Ltd are only some of the victims of Terra's collapse. 

CoinDesk’s Nathaniel Whittermore said terra marked the “first time a big mainstream audience was exposed to risks of DeFi” and US Treasury secretary Janet Yellen called the collapse a “real threat to financial stability”. 

Following Terra's implosion, policy-makers across the globe have sought to bring stablecoins into the remit of regulators. In the EU, the MiCa framework was approved, setting ground rules on stablecoins and in the UK the Financial Services and Markets Bill was unveiled in July, calling for stricter regulation on stablecoins. 

Terra's community diverged after the collapse of the stablecoin, with the original TerraUSD tokens rebranded as Terra Luna Classic and TerraClassic USD. 

According to CoinMarketCap, the new Terra Classic token is down 9 per cent and the TerraClassicUSD is down 8.5 per cent in the last 24 hours.