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South Korea court reportedly issues arrest warrant for Terraform founder Do Kwon

Key Points
  • The implosion of the Terra platform in May led to combined losses of approximately $60 billion between UST and its sister cryptocurrency luna.
  • UST, a controversial stablecoin that was meant to be pegged at 1:1 to the U.S. dollar, decoupled from its target price in mid-May and triggered a broader cryptocurrency sell-off that the digital asset sector has yet to recover from.
Do Kwon, co-founder and chief executive officer of Terraform Labs, poses in the company's office in Seoul, South Korea, on Thursday, April 14, 2022.
Woohae Cho | Bloomberg | Getty Images

A South Korean court on Wednesday issued an arrest warrant for Terraform founder Do Kwon, Reuters reported, citing a spokesperson for the prosecutors.

It escalates a probe into the founder of blockchain platform Terraform Labs, the company behind the algorithmic stablecoin UST, following the Terra project's spectacular collapse earlier this year.

The implosion of the Terra platform in May led to combined losses of approximately $60 billion between UST and its sister cryptocurrency luna.

UST, a controversial stablecoin that was meant to be pegged at 1:1 to the U.S. dollar, decoupled from its target price in mid-May and triggered a broader cryptocurrency sell-off that the digital asset sector has yet to recover from.

How Terra's stablecoin collapsed and sent shockwaves through crypto markets
VIDEO5:2605:26
How Terra's stablecoin collapsed and sent shockwaves through crypto markets

In June, Reuters reported that an unnamed official at South Korea's Supreme Prosecutors' Office said that several employees of Terraform Labs could not leave the country and had been placed on a no-fly list.

A spokesperson at South Korea's Supreme Prosecutors' Office was not immediately available to comment when contacted by CNBC on Wednesday morning.

Bitcoin was last seen trading at $20,380 on Wednesday morning in London.

The world's largest cryptocurrency climbed back above the psychologically important $20,000 mark last week after falling below the $19,000 level earlier in the month for the first time since June.

— CNBC's Tanaya Macheel contributed to this report.