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First Suspect Of The Terra Collapse Allegedly Arrested By Korean Police

As reported by a local media outlet on October 6, the Seoul Southern District Prosecutor's Office in South Korea is seeking to make the first arrest in the Terra collapse.

06 Oct 2022 By: Ashish Sarswat
First Suspect Of The

After months of inquiry without a single arrest, the South Korean police have arrested the first suspect in the collapse of the Terra blockchain ecosystem.

The arrest of Yoo Mo, head of Terraform Labs' business team, was first reported in Korean media on October 6 and was later verified by district prosecutor Choi Sung-kook.

On October 5, the Seoul Southern District Prosecutors' Office issued Yoo a bench warrant, reportedly accusing him of violating the Capital Markets Act and committing fraud by influencing the market price of the stablecoin TerraUSD (UST), now known as TerraUSD Classic (USTC). Authorities did not release any information on the arrest, such as the time or date.

Yoo's arrest order was issued in September; the executive is said to be a member of Terra cofounder Do Kwon's inner circle. Interpol issued a Red Notice against Do Kwon on September 26th, requesting "law enforcement worldwide to find and provisionally arrest a person pending extradition, surrender, or comparable legal action."

Meanwhile, a Terraform Labs spokesperson stated that South Korea's investigation against the company's top executives has turned political, accusing prosecutors of broadening the scope of security in response to public pressure. The $40 billion Terra ecosystem collapse in May 2022 triggered a crypto market meltdown that wiped out roughly a trillion dollars.

Currently, the country's capital market and electronic securities legislation do not include a legal definition of non-standardized securities created via blockchain. The government is taking steps to regulate the sector, with its financial regulator, the Financial Services Commission, creating guidelines for security tokens by the end of 2022.

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