Analog blockchain network software architect Victor Young has argued that Interpol’s search for Terra co-founder Do Kwon is unlikely to have a wider impact on the cryptocurrency sector.
Young discussed the possibility of these proceedings having a negative impact the industry with crypto publication CoinDesk this week.
Kwon is on the run after South Korea put out a warrant for his arrest. Singapore doesn’t know where he is, and Interpol has issued a red notice for him.
Meanwhile, Kwon has denied any wrongdoing and said that the manhunt was unjustified.
Kwon said recently that the catastrophic crash of the Terra and Luna tokens were attributed to a project that had gone wrong, not to a fraudulent scheme that investigators suspect.
However, Kwon’s legal vicissitudes are unlikely to have a wider impact on the cryptocurrency sector, according to Young.
“In my opinion, Terra doesn’t present systemic risks to the broader crypto markets, especially with regard to investments in the sector”, Young said.
But the regulatory action should not be brushed off. In fact, the increased scrutiny that policymakers and regulators are showing the crypto sector means that business leaders in the industry must prepare for new challenges.
Nevertheless, the fact that Terra 2.0 was launched so quickly after a multi-billion-dollar debacle also meant that authorities are behind when it comes to keeping in lockstep with industry developments.
In terms of actual impact, it’s likely that the LUNA token will continue to be subject to extreme volatility as investors either drop the token or speculate with it as they try to increase its value significantly. This volatility will once again raise concerns over whether the project can be saved at all.