The reason for the search is the collapse of the Terra ecosystem: in May this year, the TerraClassicUSD (USTC) algorithmic stackcoin lost its parity with the US dollar, causing the Terra token (LUNC) to plummet nearly to zero in a massive printing environment. This has resulted in multi-billion dollar losses and a serious fall in the capitalisation of the crypto industry. According to sources, we are talking about the equivalent of $60 billion in investor losses.

Due to this, Do Kwon’s team is suspected of manipulation and negligence in project management, which led to large losses of investors. Still, the company had serious cryptocurrency reserves to stabilise the UST, but they may have been taken advantage of too late or not well enough.

What will happen to the creator of Terra

Back home, new charges are already being prepared against Do Kwon. Journalists from the Korean Broadcasting System (KBS) news portal have received information from a local prosecutor’s office. According to him, law enforcement authorities are in possession of Kwon’s “conversation history” from which “price manipulation” with Terra can be inferred.

The prosecutor’s office allegedly has access to Kwon’s correspondence with a former Terraform Labs employee. Here is a quote from an anonymous prosecutor’s office official on the matter.

I can’t share all the details, but it’s about a history of correspondence where CEO Kwon is clear about Terra’s price manipulation.

Terra creator Do Kwon

While the exact details of the case remain undisclosed, LUNC’s price performance during the bull run last year was one of the most impressive of any cryptocurrency. According to Cointelegraph sources, the value of the altcoin rose more than 2,800 per cent from $4.18 at the end of May 2021 to an all-time high of $119.18 on 5 April 2022. The chart below shows that the value of LUNC began to fall sharply on April 30 – the very beginning of the end of the project.

LUNC exchange rate over time

Kwon himself denies any allegations against him. During his last interview he stated that he is allegedly not on the run and is willing to fully cooperate with law enforcement agencies. Meanwhile, Kwon has concealed his whereabouts in order to avoid becoming a target for angry investors.

KBS reporters note the Terraform Labs executive has often changed countries, travelling to the United Arab Emirates and Singapore. He is now allegedly in a European country. However, he does not have any valid documents on him. Here’s another quote.

Kwon, with an arrest warrant in his name, has lost his passport as of today. Do Kwon is now an illegal immigrant, wherever he is, he cannot legally travel between countries.

Do Kwon’s tweet inviting him to the conference

Kwon has also posted a message on his Twitter page inviting him to a conference – even “cops” can attend if they have “any complaints” about the Terraform Labs executive. However, there are no specific dates or locations. Perhaps this is another attempt by Do Kwon to draw attention to himself.

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Government agencies in the US are also “on the hunt” – albeit for the taxes of the country’s citizens. The US Internal Revenue Service (IRS) is preparing for “hundreds of new cases” related to crypto. This was announced the day before by IRS head of criminal investigations Jim Lee. He said there has been a significant shift in IRS investigations into digital assets over the past three years. Whereas they used to be mainly money laundering cases, now almost half of the cases are tax-related.

This includes so-called “untargeted” transactions, i.e. the exchange of digital assets for traditional currency, as well as the concealment of crypto-payments. That said, the IRS is prepared to carry out its duties in any area related to finance – including Web3. Here’s the relevant cue.

We’ve been doing this for over a hundred years, we’ve been tracking criminals in the darknet and now in the meta-universe.

Tax form.

The increase in IRS activity is linked to the upcoming US tax season. By the end of the year, US crypto investors must notify the IRS of their activity over the past twelve months, as well as close out required payments. Obviously, given the bearish trend, it is from crypto that the IRS will receive less than it did in 2021.


We think that this initiative is unlikely to end in anything meaningful. Still, if Do Kwon wanted to reach out to law enforcement, he would have done so sooner. Now, such ideas don't seem sincere and honest since Kwon has been hiding his own location for months and won't contact the government.


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