Do Kwon ordered to return passport by South Korean authorities

Quick Take

  • South Korea has ordered Terra founder Do Kwon to return his local passport in 14 days.
  • If not returned, Kwon risks losing the passport, and re-applications may be rejected.

South Korea's Ministry of Foreign Affairs has ordered Do Kwon, the controversial founder of the Terra ecosystem that crashed dramatically in May, to return his local passport.

The order was issued on Wednesday and requires Kwon to hand over his passport in 14 days. If not surrendered, the passport will be revoked — meaning, if Kwon is in South Korea, he won't be able to leave the country.

Kwon's application for re-issuance of the passport may be rejected, according to the order, if he were to apply until Sept. 13, 2023.

Kwon's current location is unclear and he is the subject of an Interpol red notice. Kwon was believed to be in Singapore, but local police recently confirmed that is not the case. Red notices are issued for fugitives wanted either for prosecution or to serve a sentence.

Kwon was behind the Terra ecosystem — both the TerraUSD (UST) stablecoin and Terra (LUNA) token — which imploded in May as UST lost its 1:1 peg against the U.S. dollar, wiping out around $40 billion in investor wealth. The Terra collapse also pushed several crypto firms toward insolvency and financial troubles, including Three Arrows Capital and Vauld.

Last month, the Seoul Southern District Prosecutors' Office issued an arrest warrant for Kwon. He is charged with violating the country's Capital Markets Act.

Last week, Terraform Labs said it believes prosecutors are acting unfairly and that LUNA wasn't legally a security to be covered by the country's capital markets law. “We believe that this case has become highly politicized, and that the actions of the Korean prosecutors demonstrate unfairness and a failure to uphold basic rights guaranteed under Korean law,” the company said.

Kwon recently tweeted that he is "not on the run" from any government agency. He has also denied reports that say his funds, worth millions of dollars, have been frozen by prosecutors.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.