Do Kwon’s close circle included the head of Terraform Labs’ business team.

South Korean police have reportedly apprehended the first person engaged in the Terra blockchain ecosystem collapse after months of inquiry with no arrests and the major offender on the run, mocking the enforcers on Twitter.

The arrest of Yoo Mo, the leader of Terraform Labs’ business team, was reported in Korean media on November 6, and district prosecutor Choi Sung-kook later confirmed the information to Forkast.

On November 5, the Seoul Southern District Prosecutors’ Office issued Yoo a bench warrant, apparently 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).

Yoo’s arrest order was issued in September; the executive is thought to be a member of Terra cofounder Do Kwon’s inner circle. Interpol issued a Red Notice on 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 spokeswoman stated that South Korea’s investigation into 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 UK is taking steps to regulate the market, with the Financial Services Commission creating standards for security tokens by the end of 2022.