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Retail investors are on the alert to hunt down crypto's most wanted man

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Kang Hyung-suk’s faith in cryptocurrencies was shattered by the $40 billion collapse of Terraform Labs, the cryptocurrency operator that Do Kwon used to work for in Seoul. Now he’s looking for answers.

In about 10 days, Kang flies to Dubai, the capital of the crypto-friendly United Arab Emirates, where Kwon believes he’s hiding. “Finding it might be easier than you think,” Kang said.

The 26-year-old software engineer belongs to the UST Restoration Group, an association of nearly 4,400 crypto investors trying to find Kwon, wanted in South Korea for financial fraud charges.

“I want to recruit other people to join the search,” Kang said. “50-50 percent chance of catching him in Dubai.”

The international manhunt for Kwon, a 31-year-old Stanford-trained entrepreneur, intensifies as retail investors try to recover from devastating losses caused by the May crash of the terraUSD and luna coin.

As investors filed class action lawsuits against Kwon in Singapore and the US, Interpol issued a red notice for him. South Korea is expected to revoke his passport on Wednesday.

In an interview on the crypto podcast Unchained this week, Kwon claimed that the charges against him were “unlawful” and “politically motivated”. He said he complied with document requests from South Korean prosecutors and apologized to the victims of the collapse of the blockchain system.

He denied any wrongdoing, but refused to reveal his whereabouts, citing security concerns. According to South Korean officials, his last known location at the end of April was Singapore.

URG members share their findings about Kwon and his company via Discord, a social messaging platform, and scour the internet for clues to his whereabouts. Members suggested that Kwon could be in Dubai, Russia, Azerbaijan, Seychelles or Mauritius, among other places.

“Dubai is cryptocurrency friendly, very international (it won’t stand out), and has limited returns deals,” a URG member said in a September 28 report. “Seems to be optimal for 3-5. the time zone shift that appears in the data.

URG consists of members from around the world. “His days are numbered,” said a senior URG member nicknamed Antithesis, who introduced himself as a 31-year-old, Ivy League-educated American. “We have people who are very, very close to Do Kwon.”

He claimed that his group did “a lot” of work to find Kwon. “Obviously I wouldn’t go into details because publishing our methods would have disabled them. Still, I think we did more than anyone else.”

Antithesis said it lost a large chunk of its several hundred thousand dollars worth of life savings by betting on terraUSD, calling the experience “devastating.”

“The entire timeline of my life’s plans was turned upside down and went back years. “The stress on him has probably gone a few years out of my life,” he said.

Another URG member, nicknamed HKTrader, said he worked for a Hong Kong-based fintech company and spent his savings on a house in terraUSD. He said he spent a month organizing a class action lawsuit against Kwon in Singapore and hired a private detective to find out his place in the country.

“We followed [him] He’s doing pretty well when he’s in Singapore,” HKTrader said, adding that his group lost track of Kwon after he left the city-state.

He said he doubted Interpol’s ability to find Kwon. “You know how Interpol works. It’s up to the host country to act,” he said.

Still, even if Kwon were arrested and extradited to South Korea, experts said it would not be easy to convict and punish him for financial fraud or violation of capital market rules due to uncertainty over whether crypto is subject to securities law.

“Given the lack of legal grounds to punish crypto players, I wonder how effective legal action could be against him,” said Choi Hwa-in, a crypto expert in Seoul. “This will push the crypto market further, drive their value down and ultimately hurt more investors.”

This month, a South Korean court denied prosecutors’ request to issue an arrest warrant for Kwon’s close associate who oversees Terraform Labs’ commercial operations, questioning whether terraUSD and luna qualify as investment securities under the country’s capital markets law.

Terraform Labs said the company would continue to communicate with authorities, but accused South Korean prosecutors of speaking to the press.

“Recent developments confirm that Terraform Labs and its stakeholders continue to be subject to a highly politicized and unregulated legal environment in South Korea,” the company said. “The facts are on our side and we look forward to the truth coming to light in the coming months.”

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