According to Yonhap News, an arrest warrant for Mr Yu — described as a key figure in the team — has been dismissed by a local court.
South Korea's efforts to bring Terra employees to justice after the collapse of LUNA and UST may have suffered a setback.
According to Yonhap News, an arrest warrant for Mr. Yu — described as a key figure in the team — has been dismissed by a local court.
The judge said it was "difficult to see the necessity and significance of the arrest."
Prosecutors had requested an arrest warrant on charges of violating South Korea's Capital Markets Act, as well as fraud.
It is alleged that Yu used a bot program for market manipulation — artificially increasing trading volumes and influencing prices.
The prosecution may now go back to the drawing board and could consider reapplying for an arrest warrant in the future.
This was the first time that South Korea had requested an arrest warrant in this case, and efforts to capture Do Kwon are continuing.
The Terra co-founder's passport has now been invalidated, and he has less than two weeks to return it.
An Interpol red notice has also been issued that means law enforcement agencies around the world have been tasked with locating and arresting the 31-year-old.
