Terraform Labs co-founder Do Kwon hit with arrest warrant related to Terra unraveling behind crypto rout

The unraveling of the Terra platform in May included the collapse of the TerraUSD stablecoin, shaking faith in the digital-asset sector, which has yet to recover much of the losses.

Do Kwon’s followers referred to themselves as “Lunatics” in reference to Luna, another token that was part of the ecosystem he helped to create. He found himself at the center of one of crypto’s biggest blowups when TerraUSD, also known as UST, crumbled from its dollar peg and brought down the ecosystem he had built.

The prices of both tokens tumbled to near zero, a shadow of the combined $60 billion they once commanded.

Terra’s unraveling triggered investigations in South Korea and the U.S., as well as renewed regulatory scrutiny of stablecoins — digital tokens that are pegged to an asset like the dollar. Stablecoins are a popular vehicle for investors seeking to park cash away from more volatile coins, and they make it easier to move funds onto crypto exchanges.

In July, prosecutors raided the home of Terraform Labs co-founder Daniel Shin as the probe into allegations of illegal activity behind the collapse of TerraUSD deepened.

Kwon has said he plans to cooperate when the time comes. In an interview with crypto media startup Coinage that floated the prospect of jail time, Kwon said, “Life is long.”