Terraform Labs believes South Korean prosecutors have “highly politicized” the case against founder Do Kown after an arrest warrant was issued for him, the firm told the Wall Street Journal (WSJ).

A spokesperson for the Singapore-based firm told the WSJ: “We believe that this case has become highly politicized and that the Korean prosecutors’ actions demonstrate injustice and a breach of basic rights guaranteed under Korean law.”

The company, which introduced the failed cryptocurrencies TerraUSD and Luna, also believes prosecutors are overstepping their authority as Luna was legally unsafe, which would mean South Korea’s capital markets law does not cover it.

“We believe, like most in the industry, that Luna Classic is not, and never has been, a security, despite changes in interpretation that Korean financial officials may have adopted recently,” the spokesperson told the WSJ.

According to Blockchain.News, Kwon and five other Terraform Labs executives faced accusations that they violated capital markets laws in South Korea. On September 13, they received an arrest warrant from the Seoul court for allegedly violating the nation’s capital markets law after the highly publicized collapse of their UST algorithmic stablecoin and its associated Luna token in May.

Nearly two weeks later, an Interpol Red Notice was issued for his arrest following a request from prosecutors in South Korea.

Kwon, however, said on Twitter that he was “not making any effort to hide” following red notice reports for his arrest. But Singapore police released a statement saying Kwon was not in their jurisdiction, Reuters reported on September 17.

the spokesman of Terraform Laboratories – which oversees the development of the Terra blockchain protocol – declined to provide Kwon’s location. “Do Kwon’s location has been a private matter for months due to ongoing physical safety risks to him and his family.” He added that there were attempted home invasions at his residences in South Korea and Singapore.

The price of Luna crashed by more than 99% over a few days in May, and with the collapse of TerraUSD, the crash wiped out some $40 billion of value from the digital currency markets. In addition, it wiped out the savings of thousands of investors around the world.

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