Interpol issues a red alert to Do Kwon, the creator of cryptocurrency business Terraform.

Do Kwon, the creator and CEO of Terraform Labs, which wiped out $40 billion in investor funds, is now sought by Interpol, which has issued a red alert for him.

South Korean authorities have asked Interpol for help in locating Kwon, the sought founder of Terraform Labs who is suspected of fraud following the dramatic collapse of the firm's cryptocurrency earlier this year.

According to the Yonhap news agency, the request came after Singapore police stated that Kwon was not in the city-state where prosecutors believed he was staying.

The blockchain firm has been investigated for alleged fraud and tax evasion after investors in its cryptocurrencies, TerraUSD and Luna, filed complaints against Kwon in May, accusing him of running a Ponzi scheme and causing billions of won in losses following the crash of both coins earlier that month.

The Seoul Southern District Prosecutors Office has obtained court arrest orders for Kwon and five others, including Terraform founding member Nicholas Platias, in an attempt to repatriate and detain them.

Prosecutors have also demanded that the passports of the five South Korean citizens under investigation be revoked. The sudden fall of the TerraUSD and Luna cryptocurrencies frightened many young investors, with some claiming their whole holdings had been blown up or leaving suicide threats.

The once-bullish TerraUSD and sister counterpart Luna had lost almost all of their value in a crash that began in May, sending shockwaves throughout the world.

TerraUSD, also known as "stablecoin," and its digital coin counterpart, Luna, traded in the ten cent range and virtually at zero, respectively, falling more than 99.99 percent from their highs and wiping out approximately $40 billion in investor funds in a week.

According to South Korean financial officials, some 280,000 investors are thought to be holding approximately 70 billion Luna coins as of late.