Terraform Employee’s Arrest is Unwarranted, Judge Says

South Korean judge reportedly said arresting Terraform’s head of business operations isn’t necessary

article-image

Seoul Central District Court Building; Source: Shutterstock

share

key takeaways

  • Yoo Mo, a key Terraform employee, was accused of using a manipulative bot program
  • His return to South Korea and cooperation with prosecutors aided the judge’s decision

A key Terraform staff member was released from interrogation after a South Korean court judge determined there’s little reason he should be held.

Local outlets Yonhap and SBS reported on Friday that the court dismissed an earlier-issued arrest warrant for the employee Yoo Mo. Judge Hong Jin-pyo of the Seoul Southern District Court reportedly considers detainment as unnecessary.

Yoo Mo, Terra’s head of general affairs, allegedly used bot programs to manipulate the firm’s stablecoin UST, prior to its depeg from the dollar and lead to the Terra ecosystem’s collapse. Subsequently, Terra’s collapse took down multiple centralized companies like Celsius, Voyager and Three Arrows Capital.

He was the first Terraform Labs’ employee to be arrested in connection with the incident.

Despite the accusations, Yoo is currently not a wanted individual. The fact that he didn’t deny operating and running the bot program in dispute was a critical factor in Judge Hong’s decision. 

Other key considerations that the judge took into account were whether Luna was an “investment contract” under the capital markets law, the extent of Yoo’s complicity in the matter and that he voluntarily returned to South Korea after a warrant for his arrest was issued. 

The report didn’t state where Yoo returned from, but it is believed the warrants were issued for Terraform employees who were and still may be in Singapore.

Still, the Judge declared that the crime of causing massive customer losses was serious and that some charges have been clarified.

A Terraform Labs spokesperson said recent developments reaffirm that the company and its stakeholders “remain subjected to a highly politicized and erratic legal environment in South Korea.”

“Terraform Labs has been — and will continue to be — in contact with all government agencies that have asked to communicate. The facts are on our side, and we look forward to the truth coming to light in the coming months,” the spokesperson added in an email to Blockworks.

South Korean prosecutors are reportedly now considering whether to reapply for an arrest warrant for Yoo. They’re also hastening moves to chase Terraform CEO Do Kwon, who claims he isn’t on the run

On Wednesday, the Ministry of Foreign Affairs ordered Do Kwon to hand over his passport within 14 days. The document would be automatically invalidated if he doesn’t comply.

The Seoul prosecutor’s office didn’t return Blockworks’ request for comment by press time.

This article was updated with Terraform’s comment on Oct. 8 at 2:33 am ET.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

The stablecoin issuer now plans to offer 32 million Class A common stock shares at a price of up to $28 each

article-image

Let’s go whale watching, Bitcoin style: Investigating the mysterious “12ib7” wallet now worth $3.2 billion

article-image

Bitget’s L2 is undergoing a leadership change and will be helmed by Colin Goltra, formerly the blockchain’s chief growth officer

article-image

The funding was spread out across 61 rounds, a slight dip in both number of rounds and total funding in comparison to other months

article-image

Why is it controversial to say things are better than they used to be?

article-image

Wallchain could make influencer ROI more measurable for Solana businesses