Do Kwon is on the run and not cooperating with investigators

Terraform Labs co-founder Do Kwon [SCRREN CAPTURE]

Do Kwon is on the run and is not cooperating with the investigation into the collapse of TerraUSD and Luna, according to multiple media reports in Korea.

The coins lost almost all their value in May, wiping out about $40 billion of wealth and shattering confidence in the boarder cryptocurrency market.

Prosecutors say that Kwon went to Singapore in April, a month before the crash of Terra coins, and may have been on the run at that point, according to a report in Yonhap published on Sunday.

Kwon and Daniel Shin are the co-founders of Terraform Labs, the company behind TerraUSD and Luna.

"Issuing an arrest warrant was possible because there were clear indications that Kwon was on the run," Yonhap quoted a prosecutor as saying.

The sources, from the Seoul Southern District Prosecutors' Office, added that the circumstances at the time of his departure indicated that he was fleeing to avoid investigation.

Kwon is not cooperating with the investigation, the person added.

In an interview released in August, Kwon told Coinage that "we've never been in touch with the investigators." He added that "they've never charged us with anything. They haven't reached out to us at all."

Following the interview, Kwon hired an attorney in Korea.

Prosecutors are reviewing whether to categorize Terra coins as securities. If the coins are determined to be securities, capital markets laws may have been violated. This includes unfair trading and price manipulation.

"We don't know if it will be one offense or two, but we will not stop" the investigation, Choi Sung-kook, a prosecutor, told Forkast.

Prosecutors in Korea raided the homes of Shin and former employees of the company, offices of crypto exchanges, including Upbit and Bithumb, and related firms, including Kernel Labs, a blockchain consultancy firm.

The prosecution prohibited Shin and certain former and current employees of Terraform Labs from leaving Korea. A "notification upon arrival" order has been issued for Kwon, meaning that investigators will be told when he enters the country.

Kwon's whereabouts are unknown. According to a Reuters report quoting a statement from Singapore police, Kwon is not in Singapore.

"I am not 'on the run' or anything similar — for any government agency that has shown interest to communicate, we are in full cooperation and we don't have anything to hide," Kwon tweeted Sunday.

Prosecutors are seeking permission from Korea's foreign ministry to have Kwon's passport revoked. If that happens, Kwon would have to return to Korea within two weeks, according to policy.

Kwon applied for an EntrePass that allows eligible foreign entrepreneurs to start and operate a business in Singapore that is venture-backed or possesses innovative technologies. But Kwon was rejected, according to the Straits Times, citing Ministry of Manpower records.

BY JIN MIN-JI [jin.minji@joongang.co.kr]