Wanted crypto exec linked to $60 billion crash faces passport freeze

South Korean authorities on Thursday began the process of canceling the passport of Terraform Labs founder Do Kwon whose company was behind a dramatic $60 billion cryptocurrency collapse.

Police have also arrested one person in connection with Kwon’s operations.

Kwon has been ordered by the South Korean foreign ministry to return his passport by Oct. 19 or face having the document canceled.

The saga between Kwon and South Korean authorities continues to intensify after the collapse of terraUSD and luna wiped billions off of the cryptocurrency market and sent shockwaves through the industry. Terraform Labs, Kwon’s company, was behind both of those digital coins.

South Korean authorities looked to arrest Kwon’s last month and claimed he is on the run. The prosecutors said that Interpol, the global policing organization, has issued a “Red Notice” for Kwon. Such notices are issued for fugitives wanted either for prosecution or to serve a sentence.

Kwon, however, insists he is not on the run. His whereabouts is still unknown.

The Seoul Southern District prosecutors’ office, who is chasing Kwon, has accused the founder and five others of violating capital markets law and fraud. On Thursday, the office confirmed to CNBC that it had arrested one of the people it was looking for surnamed Yu.

No arrest warrant has yet been issued. But authorities are able to arrest someone on the grounds of concern that this person may flee. A warrant needs to be granted within 48 hours of the arrest or the person must be let go.

South Korean prosecutors have also put in a request to KuCoin and OKX, two cryptocurrency exchanges, to freeze more than $60 million bitcoin tied to Kwon.

On Wednesday, local media reported that prosecutors had frozen an additional 56.2 billion South Korean won ($39.9 million) of digital assets belonging to Kwon.

However, the crypto founder refuted those claims on Twitter. Kwon said no funds have been frozen.

The Seoul Southern District prosecutors’ office declined to comment on the report of the frozen funds.