After having his cryptocurrency company crash and burn, it seems like Kwon Do-hyeong, Terra Luna’s founder, has more obstacles ahead of him than he might have thought.
For the “cryptocurrency bros” among us, you’ve probably heard of Terra Luna, a cryptocurrency company that was founded by Mr Kwon, a South Korean.
The 31-year-old, who is known as Do Kwon, founded Terraform Labs in 2018 with a partner after failing at his first attempt to invent a stablecoin project.
And for those who have absolutely no idea who I’m talking about, here’s all you need to know about him before we dive right in:
Yes, very ironic how he laughed at people for being poor if they didn’t invest in his cryptocurrency when his cryptocurrency company… crashed.
Kwon Trying to Apply for New EP in Singapore
But anyways, Kwon is currently based in Singapore after facing several fraud allegations due to Terra’s operations, and he has allegedly tried to apply for a new Employment Pass (EP) in Singapore due to the fact that his current one is expiring on 7 December this year.
Apparently, his new EP is still “pending approval” for now.
On the other hand, the Ministry of Manpower (MOM) also have records showing that Kwon tried to apply for an EntrePass previously, but was not successful in doing so.
EntrePasses are passes issued to selected foreign entrepreneurs who have a company that “is venture-backed or possesses innovative technologies”.
The pass allows them to create and operate their business in Singapore.
May Not Get EP Due to South Korea’s Attempts to Invalidate Passport
However, despite Kwon’s EP still “pending approval”, it seems like he might not be able to get his EP based on the plans that South Korea has to make him go back to his home country.
In particular, the authorities in South Korea are apparently looking at invalidating Kwon’s passport, which will leave him with no choice but to return to the country.
Apart from that, officials are allegedly looking to file an extradition request in Singapore in order to ensure that Kwon has to return back to South Korea.
More recently, a court in Seoul announced the issue of an arrest warrant for Kwon due to fraud claims on Wednesday (14 September).
And he’s not the only one affected by this—another five people, also based in Singapore, were issued warrants as well.
These five individuals were issued warrants due to the fact that allegations regarding them breaking laws in South Korea’s capital markets have been made against them.
South Korean Police Currently Looking Into Issues Related to Kwon and Terraform Labs
As for how Kwon’s actions came to light, the Financial Times previously reported that the relevant authorities in South Korea apparently started looking into issues related to Kwon and Terraform Labs due to two complaints being filed against the company.
The complaints, which represented a whopping 81 investors, accused Kwon and Terraform Labs of “deceiving investors”.
After a series of investigations, South Korean prosecutors are currently trying to find ways of forcing Kwon to leave Singapore and return to South Korea, with some plans including working with Interpol or invalidating his passport.
With regards to his extradition, South Korea does not have Singapore on its list of bilateral extradition treaties, which will increase the difficulty of getting Kwon to return to South Korea.
Sunil Sudheesan, lawyer and Head of the Criminal Department at Quahe Woo & Palmer, explained that the lack of an extradition treaty between Singapore and South Korea will make it more inconvenient for Kwon to be brought back to South Korea, but suggested that an Interpol red notice on Mr Kwon might make the process of getting Kwon to return easier.
As for Rajan Supramaniam, a veteran criminal lawyer from Regent Law, he said that MOM will consider various factors such as criminal records and charges whenever a foreigner holding a work pass tries to renew it.
After taking these issues into consideration, the relevant authorities can make a “discretionary decision”.
Kwon’s Business is Registered in Singapore
With a paid-up capital of just $12, Kwon set up Terraform Labs, a Singapore-registered company which handled the Terra Luna and TerraUSD, also known as UST, cryptocurrencies. Both cryptocurrencies have since collapsed.
Yes, just $12, meaning that while most of us were buying our two or three cups of bubble tea throughout a week, Kwon used that same amount of money to create his company.
UST first experienced its downfall in May this year after it “crumbled from its dollar peg” It had previously tried to offer a 1-to-1 peg with the USD dollar.
With the decline of UST, the Terra Luna coin was also affected. Its value took a huge hit, decreasing from more than US$100 to just US$0.90 after UST’s downfall.
Thereafter, a “concerned citizen” who apparently had information regarding over 1,000 Singaporean investors who invested in the two cryptocurrencies made a police report regarding the issue.
According to The Straits Times, there were no police investigations related to this matter that were going on when the report was made.
How the Arrest in South Korea May Affect His Company in Singapore
However, despite a rather clear plan that the South Korean authorities have to arrest Kwon and revoke the validity of his passport, whether or not Kwon can continue operating his company in Singapore is still unknown.
Based on The Straits Times, even though EP applicants are required to have a valid passport when they first apply for the EP, the EP’s validity is not related to the validity of the pass holder’s passport.
Hence, if the passport expires before the issued pass does, it will not affect the pass holder’s ability to work in Singapore.
However, Mr Rajan also said that the government has the ability to revoke EPs if the pass holder breaks the law.
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