South Korean prosecutors have frozen $39.6 million in cryptocurrencies belonging to the founder of Terraform and the creator of the failed TerraBlockchain project Do Kwon. An arrest warrant for Kwon was issued less than a month after the country s authorities issued a warrant for him following the collapse of the LUNA criptocurrency.
Kwon denied the claim and refuted the reports about his funds getting frozen. In a statement, he said the report was a falsehood and I don't know whose funds they have frozen. There were reports that South Korean authorities had begun a process to cancel his passport. South Korea's foreign ministry gave Kwon 12 days to return his passport or face having the document canceled, CNBC reported. He has until October 19 to turn his passport in.
Since the manhunt began about two months ago, Kwon has been running away from the authorities due to a $60 billion collapse of the digital currency. There were reports that police have also arrested one person in connection with Kwon's operations.
It started in May when the collapse of Luna and TerraUSD roiled the world's criptocurrency markets. Terra Luna, the coin that is associated with TerraUSD UST, suddenly collapsed overnight, losing 99% of its value as investors lost their life savings.
Kwon, who founded the Terraform Labs, has been accused of fraud by investors in the wake of the collapse.
Terra, which was ranked among the top 10 most valuable cryptocurrencies, dropped from its $120 peak last month to below $1 on May 13. Terra's luna UST is a controversial stable coin designed to support UST's one-to-one peg with the U.S. dollar. The UST and its sister criptocurrency luna lost $60 billion due to the implosion of the Terra platform.
According to a report from criptoSlate, Do Kwon is hiding from the public eye after an unknown person knocked on his front door asking for him. Kwon fled the scene and the local police have opened an investigation. Another post on Twitter confirmed the report that Kwon's spouse requested police protection.