Do Kwon's right-hand man led Terraform Labs' business team.

Do Kwon's right-hand man was the head of Terraform Labs' business team.

After months of investigation, South Korean police have captured the first person involved in the Terra blockchain ecosystem collapse. The main offender is still on the run, but authorities are hopeful that this arrest will lead to more information and eventually the capture of the individual responsible for the collapse.

The arrest of Yoo Mo, the head of the business team of Terraform Labs, is a major blow to the company. With Choi Sung-kook confirming the information, it is clear that the authorities are taking this matter seriously. This will likely have a negative impact on Terraform Labs' reputation and could lead to more scrutiny from the government.

The Seoul Southern District Prosecutors' Office issued a bench warrant on Yoo on Nov. 5, reportedly charging him with the violation of the Capital Markets Act and fraud by manipulating the market price of the stablecoin TerraUSD (UST), now known as TerraUSD Classic (USTC). Authorities did not reveal details of the arrest such as the time or date. However, they did say that Yoo will be brought in for questioning soon. This is a developing story and more information will be released as it becomes available.

It is believed that Yoo is a part of the inner circle of Terra's cofounder Do Kwon. As such, his arrest warrant issued in September is not surprising. However, the issuance of a Red Notice by Interpol is a significant development. This notice requests that law enforcement worldwide locate and provisionally arrest Do Kwon. This suggests that Interpol is taking the allegations against Terra and its founders very seriously.

The Terraform Labs case has become political, with the company's spokesman claiming that prosecutors are expanding the definition of security in response to public pressure. The $40 billion Terra ecosystem collapse in May 2022 led to a crypto market rout that wiped out nearly a trillion dollars from the crypto market.

The financial regulator in the country is preparing guidelines for security tokens by the end of 2022. This is a positive step towards regulating the space and providing a legal definition of non-standardized securities issued through a blockchain. This will provide clarity and certainty for businesses and investors operating in this space.