South Korea seeks Interpol red notice for Terra crypto founder

SEOUL, South Korea — South Korean prosecutors have asked Interpol to issue a red notice for Do Kwon, the founder of failed cryptocurrency Terra, saying he was refusing to cooperate with their probe into its $40 billion collapse.

An official from the Seoul Southern District Prosecutors' Office told AFP Tuesday that they had asked authorities to cancel Kwon's South Korean passport, saying that he was clearly "on the run" from the law.

"We have begun the procedure to place him on the Interpol red notice list and revoke his passport," the official said, adding that Kwon had told investigators through his lawyer that he would not cooperate.

The collapse of Terraform Labs earlier this year wiped out about $40 billion of investors' money and shook global crypto markets.

A South Korean court last week issued an arrest warrant for Kwon, 31, who flew from South Korea to Singapore ahead of the crash. 

Questions about his whereabouts intensified after the Singapore Police Force said this weekend that he was not in the country.

"We see him as being 'on the run' from the moment when he left for Singapore," the official said, adding: "We are aware that he has no will to cooperate with all investigations since then."

Kwon, who has remained active on Twitter, on Sunday denied that he was on the run, but did not reveal his exact whereabouts.

"For any agency that has shown interest to communicate, we are in full cooperation and we don't have anything to hide," he tweeted.

South Korean prosecutors have also issued arrest warrants for five other people -- who have not been named -- linked to stablecoin TerraUSD and its sister token Luna.

Kwon's Terra/Luna system disintegrated in May, with the price of both tokens plummeting to near zero, and the fallout hitting the wider crypto market. 

The collapse caused more than $500 billion in losses on global crypto markets, industry data suggested.

Stablecoins are designed to have a relatively fixed price and are usually pegged to a real-world commodity or currency.

TerraUSD, however, was algorithmic -- using code to maintain its price at around one US dollar.

Many investors lost their life savings when Luna and Terra entered a death spiral, and South Korean authorities have opened multiple criminal probes into the crash.